Gold Hits Two-and-a-Half Month High Despite Treasury Bond Rally
The price of gold inched up on Thursday, reaching its highest levels in over two-and-a-half months. However, gains were capped as a short-lived rally in U.S. Treasury bonds and rising oil prices subdued the advance.
The U.S. Department of the Treasury announced an increase in repurchases of long-dated government debt to at least $4 billion from $2 billion, sending yields sliding. The 30-year yield declined 9.1 basis points, while the benchmark 10-year yield fell 5.3 basis points.
The rally was short-lived as traders resumed selling bonds on Thursday, with the 30-year yield last up 3.8 basis points to 5.232%. The surge in U.S. debt has raised fiscal concerns, with Dan Coatsworth, head of markets at AJ Bell, commenting that it would take a U.S. worker over 615 million years to earn the equivalent of America's $40 trillion national debt.