Gold Price Retreats from Two-Month High Amid US Treasury's Bond Buyback Announcement
The price of gold retreated on Thursday from its two-month high after a surprise announcement by the US Treasury to support liquidity in long-duration bonds. Spot gold fell 0.7% to $4,487.63 per ounce. The rally that pushed prices to $4,525.79 was triggered by the bond buyback announcement.
Kaynat Chainwala, AVP - Commodity Research, Kotak Securities, believes this retreat is consolidation rather than a reversal of the broader bullish trend. According to her, spot gold's drop below $4,500 an ounce looks like a correction rather than a reversal of the trend.
The US Treasury's announcement was aimed at easing borrowing costs and has put pressure on the dollar, making gold more attractive as it doesn't offer interest payments. However, Chainwala notes that some challenges remain in the market, including hawkish FOMC minutes which could cap gains if yields or the dollar rebound.
Renisha Chainani, Chief Research Officer at Augmont, thinks the precious metal has broken out of its $4,340, $4,440 range and reached its $4,500 target. She predicts that $4,600 is now next in sight.