Gold Holds Near Two-Month High as Treasury Yields Fall

Gold prices hovered near a multi-week high on Thursday, according to Econotimes reporting, supported by falling U.S. Treasury yields, a softer dollar, and market expectations for easier financial conditions. Spot gold traded just under $4,500 an ounce, after reaching an intraday high of $4,527.67 during the session. The precious metal had previously surged more than 4% on Wednesday, extending a powerful rebound following a sharp spring pullback.

The recent market shift followed a surprise decision by the U.S. Treasury. Treasury Secretary Scott Bessent doubled the size of certain liquidity-support buybacks involving longer-dated government debt, specifically targeting securities ranging from 10 to 30 years. The minimum size per operation increased to $4 billion, up from $2 billion. This policy adjustment directly followed a severe bond selloff that had pushed the 30-year Treasury yield to its highest level since 2007. The intervention successfully pushed long-term yields lower, easing immediate pressure on a strained bond market.

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Lower Treasury yields traditionally benefit gold because the metal does not generate interest. As bond yields decline, the opportunity cost of holding non-yielding bullion decreases, boosting investor demand. Meanwhile, the U.S. Dollar Index weakened, touching a three-month low against major currencies. A softer dollar reduces the cost of dollar-denominated commodities for international buyers using other currencies, adding further upward pressure to the spot price.

Broader fiscal anxieties compounded the market uncertainty. Total U.S. Federal debt surpassed $40 trillion for the first time, a historic milestone that deepened structural concerns over government finances. Analysts at ANZ noted that the expanded buyback program could signal an institutional effort to reduce soaring borrowing costs, creating an economic environment generally favorable to precious metals.

Wall Street forecasts have scrambled to catch up with the sudden market volatility. As detailed in Yahoo Finance coverage, JPMorgan’s near-term target for gold in the fourth quarter of 2026 sits at $4,500 per ounce, a significant downward revision from its earlier projection of $6,000. However, Thursday's rally pushed prices directly past that forecasted threshold, exposing the gap between rapid market movements and institutional modeling. JPMorgan Global Research had earlier trimmed its full-year average estimate to $5,243, citing softer demand from key buyers before cutting its fourth-quarter forecast by roughly 25% in July.

Other major financial institutions showed a similar pattern of shifting conviction. Goldman Sachs reduced its year-end call to $4,900 in June, down from $5,400, while also pushing back its expected first Federal Reserve rate cut into 2027. Conversely, BloFin Research offered a different perspective by comparing gold's performance against equities, noting that while gold sits below its January peak, the S&P 500 to gold ratio has rebounded significantly over the year.

Despite the recent rebound, Federal Reserve monetary policy remains a central risk for traders. Minutes from the Fed's July meeting revealed a split committee, with several officials open to raising interest rates if inflation fails to return toward the central bank's 2% target. CME FedWatch data indicated that markets are pricing a 67.3% probability that the Fed keeps interest rates unchanged in September, contrasted with a 32.7% chance of an unexpected rate hike.

Underpinning the broader market, central bank accumulation continues to provide a structural price floor. A World Gold Council survey indicated that 45% of central banks intend to increase their gold reserves, driven by persistent inflation concerns and global geopolitical uncertainty. Separate reporting highlighted a 62% jump in central bank purchases during the previous quarter, with China extending its buying streak to 21 consecutive months alongside active state purchases by Poland, Kazakhstan, and the Czech Republic.

As the market weighs whether prices can resume a march toward the $5,000 threshold before the end of the year, analysts point to several upcoming economic indicators and policy decisions that will dictate the trajectory:

• The upcoming path of U.S. Inflation data and whether price growth approaches the Federal Reserve's 2% target.
• Official September interest rate decisions from the Federal Reserve, alongside ongoing updates from central bank policy meetings.
• Future liquidity-support buyback announcements and debt management strategies from the U.S. Treasury.
• Sustained reserve accumulation reports from the World Gold Council and major sovereign buyers.

Further analysis and commentary on economic shifts can be found through our dedicated Business coverage.