Gold pulled back on Thursday, down around 0.7% to trade near $4,488 per ounce, as investors booked profits following Wednesday’s sharp 4%+ rally that took prices to $4,525.79, their highest level since June 2. The move came after a surprise announcement from the U.S. Treasury Department that it would double the size of liquidity-support buyback operations for longer-dated notes and bonds, which pushed yields lower and sent the dollar to three-month lows, boosting demand for bullion.
Adding to the bullish backdrop, total U.S. debt outstanding topped $40 trillion for the first time, drawing fresh warnings of a brewing fiscal crisis as rising social-safety-net and interest costs continue to outstrip revenue. Meanwhile, minutes from the Fed’s last meeting showed several policymakers remain open to a rate hike if inflation fails to ease toward the 2% target, even as markets currently price roughly a 67–69% probability of a September hold versus a 31–33% chance of a hike. Silver eased 0.62% to trade near $66.49, while platinum and palladium traded softer as the broader metals complex digested Wednesday’s outsized move.
Technically, gold is completing a rounded-bottom recovery on the daily chart, having reclaimed the $4,461–4,490 zone after basing in the $4,000–4,100 region through June and August. Immediate resistance sits at $4,525, Wednesday’s high, and a break above this level would open the path toward $4,600–4,700 and the $4,773 zone further out. On the downside, support holds at $4,461–4,489, with deeper support near $4,400. As long as gold holds above this zone, the current pullback looks more like profit-taking within a broader bullish structure than the start of a reversal.
The U.S. Dollar Index (DXY) fell sharply by 0.88% on Wednesday, while EUR/USD jumped by the same amount. The dollar is trading flat during Thursday’s Asian session, while EUR/USD has gained another 0.07%, reaching levels last seen in May.
Drivers
- The dollar came under heavy pressure after US Treasury Secretary Scott Bessent announced plans to increase long-term government debt buybacks to improve liquidity and ease pressure on Treasury yields.
- The Treasury Department plans to at least double buyback operations covering securities with maturities between 10 and 30 years, following the recent surge in long-term yields.
- The announcement pushed the 30-year Treasury yield sharply lower, falling from 5.337% on Tuesday to 5.196% by Wednesday’s close.
- The decline in long-term yields outweighed the hawkish tone from the July FOMC minutes, where policymakers indicated they remained prepared to raise rates if inflation does not cool.
- Lower Treasury yields and reduced concerns over bond-market liquidity have therefore weighed on the dollar, while EUR/USD continues to benefit.
Technicals
- The Dollar Index has broken below its August consolidation range of 99.40–100.06, signalling a bearish shift in the near-term market structure.
- The decline also pushed the index below the 200-day EMA near 99.62, reinforcing the downside bias.
- Further weakness could follow if the index fails to reclaim the broken support zone.
- EUR/USD maintains a bullish structure, trading above its key moving averages and breaking above a downward-sloping trendline, supporting further upside potential.
U.S. equity futures are trading broadly steady in early trade today, following a modest rebound in the previous session as long-term Treasury yields pulled back. The S&P 500 is nearly flat at 7,718 (+0.01%), while the Nasdaq is down 0.11% at 29,526 at the time of writing, as investors assess whether the recent Treasury intervention has meaningfully improved the rates backdrop or merely paused the recent bond selloff.
The S&P 500 gained 0.2% yesterday, snapping a three-session losing streak, after the Treasury Department announced plans to increase buybacks of long-dated securities. The move helped ease pressure on long-term yields, which had become a key headwind for equities, particularly technology and other duration-sensitive sectors. However, the subsequent release of the Fed’s meeting minutes, which showed that officials had favoured a rate hike at the previous meeting, kept the broader monetary-policy outlook cautious.
The pullback in yields is also supporting a rotation beneath the surface of the market. The equal-weight S&P 500 has begun outperforming as technology, semiconductors and other AI-capex beneficiaries consolidate, while recent laggards attract renewed buying interest. Attention now turns to Walmart’s earnings, which could serve as an important test of both consumer resilience and the inflation outlook. For now, the stabilization in yields has helped equities regain their footing, but the sustainability of the rebound will depend on whether the bond-market relief extends beyond the recent intervention.
Technically, SPX is currently consolidating. On the downside, the index should find support at 7,705, with the 21-day EMA at 7,665 providing the next important downside cushion. As long as these levels hold, the broader structure remains constructive despite recent volatility. On the upside, resistance remains at 7,750, corresponding to yesterday’s high, and a break above this level would suggest renewed bullish momentum. Nasdaq is also trying to consolidate as well. On the downside, a key support level to watch for is the 21-day EMA (29,370). A sustained break below this level would weaken the near-term outlook and could trigger a move toward 29,120. On the upside, if the index continues to hold its recent structure above 29,590, buyers could target the 9-day EMA at 29,657, which represents the next resistance level.
