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Gold rises toward $4,500 as dollar weakens and Treasury yields fall

Gold is around $4,490, up more than 3.5% on the day, after long term yields declined following larger Treasury liquidity-support buybacks for longer-dated securities.

Reported · Written up by our desk · Precious Metals

Gold prices climbed toward $4,500 on Wednesday, helped by a weaker US dollar and a sharp pullback in long term Treasury yields, allowing XAU/USD to push above its week old trading range, FXStreet reports. At the time of writing, gold was trading near $4,490, up more than 3.5% for the day.

FXStreet notes that the benchmark 10 year yield was down more than 5 basis points and the 30 year yield was nearly 9 basis points lower after the US Treasury said it would increase the size of its liquidity-support buybacks for longer-dated government securities. The US Dollar Index was also near 98.80, down 0.87% on the day and at its lowest level since May 29, a move that makes gold cheaper for non-USD buyers and reduces the opportunity cost of holding the non-yielding metal.

Looking ahead, the article says gold direction will likely hinge on Federal Reserve signals, with the minutes from the July FOMC meeting due at 18:00 GMT. It adds that uncertainty over the Fed rate outlook has kept focus on US data, and traders have trimmed the probability of a September hike to 32% based on the CME FedWatch tool.

FXStreet also highlights other supporting factors, including renewed investor demand, rising concerns over US government debt, and stronger central bank buying, particularly from China. At the same time, it points to inflation risks tied to the Middle East, which could keep the Fed bias tilted toward possible further tightening and cloud whether golds recent rebound can last.

Latest closeGold $4,432.00 ▲1.6%|Dollar index 99.64 ▼0.3%

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