Gram gold at a three-month high: US move stirs the markets

Following a sharp decline in the gold market, the trend has turned upward once again. The US Treasury Department's move to support liquidity in the long-term bond market led to a loosening in bond yields, which in turn brought about a rise in gold prices.

Following these developments, gold per ounce climbed to $4,464. Gram gold reached 6,878 liras, hitting its highest level in the last three months. The highest levels since June 5 were also recorded for gold per ounce.

DECLINE IN BOND YIELDS

Prior to the US Treasury Department's announcement, there was intense selling pressure on global long-term bonds. US 30-year bond yields had also climbed to their highest levels seen since 2007 earlier in the week.

With the ministry's announcement that it would increase the size of its buyback operations, buying interest returned to long-term bonds. The yield on the 30-year benchmark bond fell to 5.19 percent, a decline of up to 9 basis points. This movement was interpreted as a short-term relief in debt markets.

Market actors are also preparing for the $16 billion auction to be held for new 20-year bonds. The Treasury Department emphasized that the increase in the size of buyback operations is intended to support market liquidity.

EYES ON FED MINUTES

Another item on the markets' agenda will be the minutes of the July 28-29 Federal Open Market Committee meeting, which are expected to be released at 18:00 Turkish time. The assessments of hawkish members and any potential disagreements will be closely watched in the minutes.

Weak data coming from the US economy has increased the probability of interest rates being kept steady in September, while weakening expectations for a rate hike. It is noted that dovish messages could support gold, while strong emphasis on inflation and statements pointing to interest rate hikes could create pressure on gold through the dollar and bond yields.

News Source: 12punto