Gold slipped on Thursday as a modest recovery in US Treasury yields and the US dollar weighed on the precious metal, pulling it back from an intraday peak. XAU/USD traded at $4,509, down roughly 0.33% on the day, after touching a high of $4,540 earlier in the session.
The pullback followed a sharp rally on Wednesday when the yellow metal surged more than 4.35% and reclaimed the $4,500 mark. That move was triggered by a US Treasury announcement that it had adjusted its bond buyback programme to focus on longer-dated securities, specifically 10- to 30-year bonds. The Treasury said the aim was to improve liquidity in that part of the curve, though some market participants interpreted the move as a form of yield curve control intended to cap a rise in the 30-year yield.
Dollar edges higher; jobs data adds pressure
The US Dollar Index, which tracks the greenback against six major currencies, rose 0.14% to 98.91, adding downward pressure on gold. A stronger dollar makes bullion more expensive for holders of other currencies and tends to weigh on demand.
US economic data also played a role. Initial jobless claims for the week ending August 15 came in at 206,000, lower than the previous week’s 212,000 and below expectations of 210,000. The four-week moving average, however, climbed to 204,000 from 199,750, suggesting a slight softening in the labour market trend. Solid headline claims figures supported Treasury yields, which trimmed Wednesday’s losses and further dampened gold’s appeal.
Fed officials comment; rate expectations steady
Federal Reserve officials offered their views on Thursday. St. Louis Fed President Alberto Musalem said the bond market is being influenced by strong economic growth and capital expenditure. He noted that while he favoured rate hikes in July, he remains open-minded about the September policy meeting. Meanwhile, San Francisco Fed President Mary Daly commented that rising long-term bond yields are a global concern and that they reduce the effectiveness of yields as an indicator. She said Fed credibility is intact and that short-term markets are mainly reacting to incoming data.
Money markets assign a 68% probability that the Fed will hold rates steady at its September meeting, with a 32% chance of a 25-basis-point rate hike, according to Prime Terminal.
Technical outlook: Key levels in focus
Despite Thursday’s decline, gold retains a bullish bias after breaking a five-month-old downward resistance trendline drawn from its all-time highs near $5,600. The price also reclaimed its 200-day simple moving average, currently at $4,512, which acted as support. The Relative Strength Index remains bullish but is edging lower, suggesting some profit-taking before a potential resumption of the uptrend.
If gold closes above $4,500 on a daily basis, buyers may target the May 20 high of $4,595, followed by the psychological $4,600 level. Beyond that, $4,700 and the May 12 high of $4,735 are potential resistance zones. On the downside, initial support sits at $4,500. A break below that exposes the 100-day SMA at $4,380, then $4,300 and the 50-day SMA at $4,164.
Traders will watch Friday’s S&P Global Flash PMIs for further direction. For the latest pricing, see the live gold price.
Key takeaways
- Gold fell 0.33% on Thursday to $4,509 as US yields and the dollar recovered from Wednesday’s losses.
- Wednesday’s rally of over 4.35% followed a Treasury buyback adjustment focused on long-dated bonds.
- US jobless claims came in lower than expected, supporting yields.
- Technical bias remains bullish above $4,500; key resistance at $4,595 and support at $4,380.
Common questions
Why did gold pull back on Thursday?
Gold retreated as US Treasury yields trimmed losses from the previous session and the US dollar firmed. Both factors typically weigh on the price of bullion.
What caused gold to rally on Wednesday?
Gold surged over 4.35% after the US Treasury adjusted its bond buyback programme to focus on 10- to 30-year bonds, which some traders interpreted as a form of yield curve control.
What are the key technical levels for gold?
Support lies at $4,500, then $4,380 and $4,300. Resistance is at $4,595 and $4,600, with further upside targets at $4,700 and $4,735.
The small decline on Thursday does not alter gold’s broader bullish structure, though traders remain focused on the $4,500 threshold and Friday’s PMI data for near-term direction.