NEW YORK / RankWire.AI / – Gold hovered near a seven-week high on Thursday after experiencing its largest daily gain since February. Spot gold rose by 0.5% to $4,265.22 an ounce by 0330 GMT. The commodity had already surged 4.4% during Wednesday’s trading session. December U.S. gold futures increased by 0.5% to $4,324.60 following a 4% rise the previous day. The sharp climb in bullion prices was supported by declining Treasury yields and a softer dollar.
The upward movement pushed spot gold above its 50-day moving average close to $4,160, a level it traded below during much of its recent decline. Thursday’s rally brought gold prices back to levels last seen on June 18, with current prices exceeding Monday’s closing value by over 5%. Despite this, gold remains below its peak in May, when spot prices surpassed $4,500 an ounce amid heightened demand.
The bond markets also reflected this trend, as gold advanced. The benchmark 10-year Treasury yield was near 4.61%, down from approximately 4.74% at the end of July. On Wednesday, the two-year yield was close to 4.18%. Lower yields diminish the attractiveness of government bonds since gold does not generate interest. Meanwhile, the dollar weakened against major currencies, making gold cheaper for buyers using euros, yen, and other currencies.
Declining Treasury yields coincide with gold’s rise
U.S. employment data added new context to the market outlook. Private sector employers added 44,000 jobs in July, a significant decrease from the revised 95,000 jobs created in June. This July figure represents the smallest monthly employment increase in six months. The Federal Reserve maintained its benchmark interest rate at 3.5% to 3.75% at its July 29 meeting, with the broader employment report scheduled for release on Friday.
Gold’s recent rise offset some of its declines seen during June and July. Prices fell to around $4,008 on July 20 and traded near $4,052 on August 3. The 4.4% jump on Wednesday marked the strongest single-day performance in about six months. Thursday’s gains kept gold near the top of its recent trading range, with both spot and futures prices well above their levels at the week’s start.
Central bank buying continues to bolster the broader gold market
World Gold Council data showed consistent demand from central banks and investors. The organization reported a second-quarter demand of 1,269 metric tons, including over-the-counter transactions, matching the same quarter last year. For the first half of the year, demand increased by 2%, reaching 2,522 tons. Countries such as Poland, Uzbekistan, China, and Kazakhstan ranked among the largest central-bank purchasers during this period.
Mixed results were observed among other precious metals on Thursday’s trading. Silver declined slightly by 0.1%, settling at $62.02 an ounce. Platinum gained 1.2% to $1,755.18, while palladium increased by 0.8% to $1,374.33. Palladium’s rise marked its third straight day of gains. After Wednesday’s surge, gold remained the focal point, with prices holding near a seven-week high amid declining Treasury yields and a weakening U.S. dollar.