20.08.202600:02:42UTC+00Gold Holds Rally on Lower Treasury Yields

Gold traded above $4,500 an ounce on Thursday, holding onto gains after surging more than 4% in the previous session. The rally was supported by a sharp pullback in US Treasury yields as the government moved to rein in long-term borrowing costs. The US Treasury Department said it will more than double its repurchases of 10-, 20- and 30-year bonds over the coming months, after the 30-year yield climbed earlier this week to its highest level since 2007. Lower borrowing costs reduce the opportunity cost of holding non-yielding assets such as gold, making precious metals more appealing to investors.

At the same time, minutes from the Federal Reserve’s July meeting showed that some policymakers favored raising interest rates again this year to head off the risk of stronger inflation down the line. Adding to the focus on inflationary risks, investors continued to monitor geopolitical tensions in the Middle East, where a stalemate between the US and Iran has heightened uncertainty.