Gold pushed above $4,500 an ounce on Thursday for the first time since early June after the U.S. Treasury said it would step up purchases of long-term bonds, pulling Treasury yields lower. The move overshadowed Fed minutes showing several officials had pushed for a rate hike in July.
Gold December futures opened at $4,580 per troy ounce on Thursday, up 0.8% from Wednesday's close. The metal has since given back some of that move, trading at $4,535.80 as of 9:03 a.m. ET.
Treasury bond purchases pull yields down
The rally traces back to two announcements the U.S. Treasury and the Federal Reserve made on Wednesday. The Treasury said it would increase its purchases of long-term bonds as a maintenance measure, and the benchmark 10-year Treasury rate fell more than 5 basis points in response, while the 30-year benchmark dropped 9 basis points. Lower yields reduce the cost of holding gold relative to yield-bearing assets, so traders responded primarily to the Treasury news, pushing gold above $4,500 for the first time since early June.
Fed minutes show a push for a rate hike
Gold's gains over the past year
Thursday's opening price was up 0.8% from Wednesday's close, extending a broader run higher. Gold is up 4% over the past week, 14.4% over the past month and 38.3% over the past year. For context, gold's one-year gain reached 95.6% on Jan. 29.
Source: Yahoo Personal Finance
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