The weaker US dollar was supporting gold by making dollar-priced commodities cheaper for holders of other currencies. The market was also assessing developments in US Treasury debt management. Treasury secretary Scott Bessent said on Thursday that he may further increase government repurchases of Treasury securities. The Treasury Department had announced on Wednesday that it would double the size of buybacks of longer-dated securities over the next quarter to at least $4 billion per operation.
The developments have also brought attention to the Federal Reserve’s monetary policy outlook. Two Fed officials expressed caution when asked how changes in Treasury debt management could affect the central bank’s policy choices. Markets are pricing in a 64% chance of the Fed keeping rates unchanged in September and a 36% chance of a hike, according to the CME FedWatch Tool.
US labour-market data showed that the number of Americans filing claims for unemployment benefits slipped last week. The data suggested that the labour market remained stable despite a surprise drop in employment in July. Higher interest rates can weigh on gold’s appeal because the precious metal does not provide a yield.
In India, Bengaluru’s Thursday closing bullion rates were Rs 15,000 per gram for 22-karat gold and Rs 16,400 per gram for 24-karat gold, according to PTI. Silver was quoted at Rs 2,53,300 per kg.
Geopolitical developments could also influence market sentiment. Bessent said the United States would impose “the toughest sanctions in history” on Iran, a move he suggested would lessen the need for new major military operations.
Among other precious metals, spot silver was flat at $68.03 per ounce, platinum rose 1.1% to $1,846.29, and palladium steadied at $1,333.11. All three metals were headed for weekly gains.
Investors will also track economic data due on Friday from the UK, France, Germany, the European Union and the US, including retail sales figures and flash manufacturing, services and composite PMI readings.
