Gold Prices Soar on Weakening Dollar and Easing Treasury Yields

Gold prices rose on August 20, driven by a weakening US dollar and easing US Treasury yields. The combination of lower borrowing costs and a weaker currency boosted demand for gold, which has been rising steadily since early June. According to Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd., the decline in long-term yields weakened the dollar and removed one of the key headwinds for gold.

The US Treasury announced that it would double its buyback operations for longer-dated bonds to $4 billion from $2 billion per operation, starting September 9. This move pushed the 30-year US Treasury yield down from near two-decade highs to around 5.19%. The minutes of the Federal Reserve's July meeting showed policymakers remaining concerned about persistent inflation and potential further rate hikes.

Gold futures for October delivery on the Multi Commodity Exchange rose by Rs 264, or 0.17 percent, to Rs 1,58,260 per 10 grams, with a business turnover of 10,450 lots. Investors will now track the US weekly jobless claims and the Philadelphia Fed manufacturing index, due later on Thursday.