Gold hovers near early-June high on lower bond yields

Gold hovered near its highest level in more than two months on Thursday after a surprise liquidity support announcement by the US ​Treasury pushed yields and the dollar lower.

Spot gold was little ‌changed at $4,512.19 per ounce, as of 0031 GMT, after hitting its highest level since June 2 at $4,525.79 earlier in the day.

Prices jumped more than 4% on Wednesday.

US gold futures for December delivery rose 0.6% to $4,569.80.

Yields ​on long-dated US Treasuries fell, with the increased demand following an ⁠announcement that the Treasury Department would double the size of liquidity support ​buyback operations for longer-dated notes and bonds.

The US dollar remained subdued, making ​greenback-priced metals less expensive for buyers holding other currencies.

Total US debt has topped $40 trillion for the first time, the Treasury Department said on Wednesday, drawing fresh warnings that ​a fiscal crisis is brewing as ballooning costs for social safety-net programmes ​and interest payments far outstrip revenues held back by tax cuts.

Concern about inflation ‌deepened ⁠at the Federal Reserve’s meeting last month, with “several” policymakers ready to raise interest rates and “many” saying a hike in borrowing costs would be needed if inflation does not decline to the US central bank’s 2% target, the minutes ​of the session ​showed on Wednesday.

Traders are pricing in a 67.3% chance that the Fed will keep rates unchanged and a 32.7% chance of ​a rate increase in September, according to the CME ​FedWatch Tool.

Gold heads for weekly loss as investors unwind inflation-fuelled rally

Gold is considered a safe investment during geopolitical and economic turmoil, while higher interest rates reduce its appeal as it yields no interest.

Among other ⁠metals, ​spot silver gained 0.2% to $67.06 per ounce.

Platinum ​fell 0.4% to $1,816.78, while palladium rose 0.3% to $1,339.05.