Gold prices held near $4,400 an ounce on Thursday, buoyed by safe-haven demand even as Treasury yields rose on signs of tighter energy markets and investors awaited key inflation data.
Spot gold fell 0.2% to $4,392.61 an ounce at 06:10 ET, while gold futures slipped 0.6% to $4,435.25 an ounce. The metal has rebounded sharply from its July floor near $4,000, supported by persistent central-bank buying and growing investor interest in gold-backed exchange-traded funds.
U.S. 10-year Treasury yields rose following the government's announcement that it would purchase up to $6 billion of longer-dated debt — a figure that disappointed analysts who had expected repurchases of as much as $10 billion. Meanwhile, the U.S. dollar index sat near its weakest level in two weeks, providing additional support for the non-yielding precious metal.
Oil prices added to inflation concerns. Brent crude touched $100 a barrel for the first time since July, reigniting fears of supply disruption. "The risk is that escalation starts leading to meaningful disruptions to Strait of Hormuz flows," ING analysts said in a note. "Oil flows have surprised to the upside in recent weeks, but the market could tighten more sharply if ongoing escalation translates into disrupted oil flows once again."
Markets are now focused on Thursday's U.S. producer price index and Friday's consumer price index, both coming ahead of a Federal Reserve policy meeting scheduled for the following week. Swaps markets are pricing in roughly a 65% probability of a rate hike during the month.
Demand for gold-backed ETFs remains robust. According to World Gold Council data, global gold-backed ETFs attracted $18 billion in August — the second-largest monthly inflow on record. Holdings rose by 121 tonnes to a record 4,189 tonnes, and assets under management climbed 16% to $615 billion. North American funds recorded their third-largest monthly inflow on record, while European-listed funds posted their largest-ever monthly inflow.
