XAU/USD slips from $4,527 high after US Treasury’s liquidity move drags yields and the dollar lower, boosting non-yielding assets.
Gold (XAU/USD) pulled back to $4,488 on Thursday after surging over 4% the prior day, reaching its highest level since June 2. The rally followed the US Treasury’s announcement of increased buybacks for longer-dated securities, which drove the 30-year yield down 9 basis points to 5.18% and the 10-year yield down 5 bps to 4.63%.
The US Dollar Index (DXY) fell below 99.00, hitting a three-month low, as lower yields and a weaker dollar enhanced gold’s appeal. While the buybacks eased short-term pressure, analysts caution they do not resolve fiscal deficits, heavy debt issuance, or inflation risks. Both yields edged up 3 basis points on Thursday.
The metal’s gains reflect investor demand amid persistent inflation concerns, fueled by rising energy prices and geopolitical tensions involving the US and Iran.