US Treasury Move Triggers Gold Rally, Prices Retreat on Profit-Taking

Gold prices retreated on Thursday after surging to a two-month high following a surprise announcement by the US Treasury Department. The department said it would double the size of liquidity support buyback operations for longer-dated notes and bonds, weakening the dollar and pushing Treasury yields lower.

The move sparked a rally in gold, with spot prices reaching $4,525.79 per ounce, their highest since June 2. However, investors booked profits on Thursday, sending prices down to $4,495.69 per ounce, a 0.6% decline.

US gold futures rose 0.2% to $4,553.30, while spot silver gained 0.2% to $67.07 per ounce. Platinum and palladium prices declined, however, with platinum dropping 1.3% to $1,802.29 and palladium sliding 0.2% to $1,328.06.

Analysts note that the recent price action in gold is influenced by concerns about inflation and interest rates. Edward Meir, a Marex analyst, said that increasing concern about financial stability and borrowing debt makes gold a more attractive investment.