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Gold price surges 4% past US$4,500, holds near two-month high
Aug 20, 202608:39 AM
Gold price surges 4% past US$4,500, holds near two-month high
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Gold prices remained near a more than two-month high on Thursday after a surprise U.S. Treasury liquidity support announcement pushed Treasury yields and the dollar lower.

 

Spot gold was little changed at $4,512.19 per ounce as of 0031 GMT, after touching $4,525.79, its highest level since June 2. Gold prices jumped more than 4% on Wednesday.

 

U.S. gold futures for December delivery rose 0.6% to $4,569.80.

 

Longer-dated U.S. Treasury yields declined following the Treasury Department’s announcement that it would double the size of its liquidity-support buyback operations for longer-dated notes and bonds.

 

The U.S. dollar also remained subdued, making gold cheaper for buyers holding other currencies.

 

Markets are also assessing growing concerns over the U.S. fiscal position after the Treasury Department said total U.S. debt had surpassed $40 trillion for the first time.

 

Meanwhile, minutes from the Federal Reserve’s latest meeting showed that several policymakers were prepared to raise interest rates, while many said rates could need to increase if inflation fails to fall toward the Fed’s 2% target.

 

According to the CME FedWatch Tool, traders are pricing in a 67.3% chance of no rate change in September, compared with a 32.7% probability of a rate increase.

 

Gold is generally viewed as a safe-haven asset during periods of economic and geopolitical uncertainty, while higher interest rates can reduce its appeal as the metal does not pay interest.

 

Among other precious metals, spot silver rose 0.2% to $67.06 an ounce, while platinum fell 0.4% to $1,816.78. Palladium gained 0.3% to $1,339.05.

 

– with Agencies inputs --

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