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 U.S. dollar lower.
Spot gold was little changed at $4,512.19 per ounce as of 0031 GMT, after reaching $4,525.79, its highest level since June 2. Gold prices had surged more than 4% on Wednesday.
U.S. gold futures for December delivery rose 0.6% to $4,569.80.
Longer-term U.S. Treasury yields declined after the Treasury Department announced it would double the size of its liquidity-support buyback operations for longer-dated notes and bonds. The weaker dollar also supported gold by making the metal cheaper for buyers using other currencies.
Markets are also monitoring concerns over the U.S. fiscal position after total U.S. government debt 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 others said rates could need to increase if inflation fails to move toward the Fed’s 2% target.
According to the CME FedWatch Tool, traders are pricing in a 67.3% probability of no rate change in September, compared with a 32.7% chance of a rate increase.
Gold is generally considered a safe-haven asset during periods of economic and geopolitical uncertainty, while higher interest rates can reduce its appeal because gold does not generate 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.
