Gold rate today: Gold prices declined on Thursday as investors locked in profits after the precious metal surged to a more than two-month high. The rally was triggered by a surprise US Treasury announcement to support liquidity in long-duration bonds, which pressured the dollar and pushed Treasury yields lower.
Spot gold fell 0.7% to $4,487.63 per ounce. On the previous day, bullion touched $4,525.79, its highest level since June 2, after gaining more than 4% on Wednesday. Meanwhile, US gold futures were largely unchanged at $4,545.60.
However, in the domestic market, gold prices on the Multi Commodity Exchange (MCX) edged up slightly to trade at ₹1,58,300 per 10 grams.
What’s driving gold prices?
The US Treasury unexpectedly announced on Wednesday that it would significantly increase its buybacks of long-dated government bonds, indicating an effort to ease borrowing costs after yields climbed to multi-decade highs. The move enhances gold’s attractiveness, as the precious metal does not offer interest payments.
The department said it would increase the size of its liquidity-support buyback operations by at least two times for securities with maturities ranging from 10 to 30 years. Just hours later, it revealed that total US public debt had crossed the $40 trillion mark for the first time.
Although the move points to stronger official support for the Treasury market and could contribute to easier financial conditions, thereby reducing the opportunity cost of holding non-yielding assets such as gold, some challenges remain.
Gold has largely stayed above the crucial $4,000-per-ounce support level in recent weeks, with buyers increasingly stepping in during price declines following a war-led sell-off that pushed the metal into bear-market territory in June. However, gold remains about 15% below its level before the US-Iran conflict began in late February.
Gold price outlook
Kaynat Chainwala, AVP – Commodity Research, Kotak Securities, believes that spot gold’s retreat below $4,500 an ounce looks like consolidation rather than a reversal of the broader bullish trend, with $4,400 standing out as strong support on the downside.
Chainwala explained that the rally that took prices to $4,524, their highest since early June, was driven by a decline in long-term Treasury yields after Washington announced larger buybacks of longer-dated debt, easing fiscal supply concerns, lowering gold’s opportunity cost and weakening the dollar.
“The hawkish FOMC minutes have complicated that picture, with several officials open to further tightening if inflation stays sticky, a stance that could cap gains if yields or the dollar rebound. Continued central bank buying, ETF inflows and any renewed yield softness would preserve the upside bias. Crude holding near multi-week highs on the West Asia standoff adds to the inflation debate, raising the odds of a hawkish Fed stance. With Chair Warsh offering little forward guidance, his Jackson Hole tone becomes the key swing factor for gold’s near-term direction,” she said.
Meanwhile, on the technical outlook, Renisha Chainani, Chief Research Officer (CRO) at Augmont, said that the precious metal has broken out of its $4,340–$4,440 range ( ₹153,000-156,000) and reached its $4,500 target ( ₹158,500), with $4,600 ( ₹162,000) now next in sight.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
