Gold Soars on Surprise Treasury Liquidity Boost
Gold prices surged over 3% to their highest level in two-and-a-half months after the US Treasury's surprise announcement of increased liquidity support buyback operations for longer-dated bonds. The move knocked down bond yields and the dollar, making gold cheaper for holders of other currencies.
The spot price of gold rose 3.6% to $4,487.91 per ounce by 2:10 p.m. EDT (1810 GMT), with US gold futures settling 2.8% higher at $4,545.30. This marked the highest level since June 4.
The technical front saw spot gold break above its 100-day moving average of around $4,381.
Robert Gottlieb, a former head of precious metals at Koch Supply and Trading, said 'This was totally unexpected. Very bullish for gold due to lower yields on longer-dated Treasuries and as it may help to bring the dollar lower.'