Gold Retreats Amid Inflation Concerns and Hopes for Lower Real Rates

Gold prices retreated on Thursday after a sharp rally on Wednesday, as investors booked profits and concerns about higher inflation offset hopes of lower real rates.

The metal had surged more than 4% on Wednesday following a surprise announcement from the US Treasury that it would increase buybacks of longer-dated bonds, weakening the dollar and pushing Treasury yields lower.

However, gold pared some losses after Treasury Secretary Scott Bessent said in a CNBC interview that the government might increase repurchases of Treasury bonds, which could be more than $4 billion per issue.

The Federal Reserve's somewhat hawkish minutes released on Wednesday, coupled with higher oil prices, have revived inflation concerns and undermined gold.