Gold Soars as Dollar Weakens and Yields Plummet
Gold prices surged over 1% on Thursday as the US dollar softened and Treasury yields retreated from multi-year highs. This easing of pressure on the Federal Reserve to raise interest rates contributed to the gold price rally, with spot prices briefly topping $4,500/oz.
The decline in bond market yields was led by a 2.5 basis point drop in the 10-year yield to 4.769%, and a 5.2 basis point drop in the 2-year yield to 4.334%. This development is seen as a positive sign for gold, which tends to benefit from lower interest rates.
Some dovish comments from Federal Reserve Governor Christopher Waller also helped boost sentiment. In prepared remarks at a Reuters NEXT interview, Waller said that recent data suggest 'we are finally seeing some signs of disinflation' and expressed his inclination to support holding the target for the federal funds rate at its current setting.
Oil prices took a breather on Thursday, despite ongoing tensions in the Middle East. The global benchmark Brent crude last rose 0.1% to $95.70 a barrel, while WTI crude climbed 0.6% to $91.60 a barrel.