Gold surged more than 4% to around $4,519 per ounce on Wednesday after the U.S. Treasury announced plans to increase the size of its long-term debt buyback operations to support market liquidity.
The U.S. dollar traded in a narrow range against major currencies on Tuesday as markets continued to adjust expectations toward a more cautious Federal Reserve following a series of softer U.S. economic data.
According to Jeremy De Pessemier, Asset Allocation Strategist at the World Gold Council (WGC), gold should not be viewed simply as a conventional commodity. Its unique supply-and-demand structure, high liquidity, and diversification benefits give it a distinct role in strategic asset allocation.
The yield on the 30-year U.S. Treasury rose to its highest level since 2007 on Tuesday, as U.S.-Iran tensions, oil prices above $90 per barrel, and growing concerns over U.S. government debt continued to pressure global bond markets.
Gold and silver prices moved higher in Monday’s U.S. trading session, supported by a weaker U.S. dollar and reduced expectations for further Federal Reserve rate hikes. Meanwhile, a sharp rise in crude oil prices pushed Treasury yields higher and weighed on global equity markets.
At the time of writing, spot gold was trading near $4,349.80 per ounce, down 1.31%, while spot silver stood at $64.290 per ounce, down 1.40%.
Oil and gold prices moved higher on Wednesday as geopolitical tensions intensified, while investors awaited key U.S. inflation data for further clues on the Federal Reserve’s interest-rate outlook.
The U.S. dollar traded largely sideways during early Asian trading on Wednesday as investors waited for key U.S. inflation data to gain further insight into the Federal Reserve’s next policy move.
August gold futures ended the session at $4,427 per ounce, down $20.80, or 0.47%. Even so, excluding the previous session, this remained the highest closing level since June 5.
Spot gold fell 0.3% to $4,374.82 per ounce by 05:48 GMT, after hitting $4,434.84 per ounce earlier in the session, its highest level since June 5. U.S. gold futures rose 0.4% to $4,435.00.