US Treasury Move Triggers Gold Rally, But Profit-Taking Takes Hold
Gold prices retreated on Thursday after hitting a two-month high following a surprise announcement from the US Treasury Department. The department said it would double the size of liquidity-support buyback operations for longer-dated notes and bonds, which weakened the dollar and lowered Treasury yields.
The move sparked a significant rally in gold, with spot prices surging more than 4% on Wednesday to reach $4,525.79 an ounce, its highest level since June 2. However, investors booked profits on Thursday, causing gold to fall 0.7% to $4,488.19 an ounce by 0750 GMT.
Analysts say the market is experiencing a degree of digestion after the big move in gold prices. 'The $4,400 to $4,500 price range has been cleared,' said Ilya Spivak, head of global macro at Tastylive. 'If prices hold above this range, the upward momentum is likely to continue.'
Other metals also fell on Thursday, with spot silver down 0.5% to $66.60 an ounce and platinum dropping 1.6% to $1,794.91.