US Treasury Move Boosts Gold as Fed Keeps Interest Rates Unchanged

Gold prices held steady near their two-month high on Thursday, as the US Treasury's surprise move to expand its purchases of longer-dated debt helped reduce bond yields and the dollar. The Spot gold price traded around $4,512 an ounce in early Asian dealings after touching $4,525.79, its highest since June 2.

The Treasury announced it would at least double the maximum size of liquidity-support buybacks for 10- to 30-year securities, lifting the cap from $2 billion to at least $4 billion per operation between September 9 and November 4. This move helped pull the 30-year Treasury yield back towards 5.2% after it had reached its highest level since 2007.

The Federal Reserve's decision to keep interest rates unchanged also contributed to gold's stability, as several policymakers favored a quarter-point rate increase. However, markets still lean towards no change in September, with futures pricing implying roughly a two-thirds probability of a hold.