Gold hits $4,488 despite profit-booking after rally

Gold slipped on Thursday as traders booked profits after bullion hit a two-month peak in the previous session, Mettis Global reported. Even so, spot gold was 3.2% higher at $4,488.55 an ounce at 10:00 am PST.

The rally followed a Wednesday announcement by the U.S. Treasury, reported by Reuters, that it would double the size of its liquidity-support buybacks of longer-dated notes and bonds. That step pushed the dollar lower and eased Treasury yields, coming after heavy bond selling as investors pushed for bigger returns amid rising inflation fears connected to the continuing U.S.-Israeli conflict with Iran. Separately, America's total outstanding debt crossed $40 trillion for the first time, which has revived analysts' doubts over the durability of government finances.

Inflation worries also emerged within the Fed, as minutes from last month's meeting, made public on Wednesday, indicated that a number of officials were inclined to raise rates. Futures markets, per the CME FedWatch Tool, put a 67% chance on rates staying put in September and a 33% chance of a hike. Rate increases tend to make non-yielding assets such as gold less attractive, although the metal is also seen as a hedge against inflation. Elsewhere in metals, silver rose 0.2% to $67.07 an ounce, platinum dropped 1.3% to $1,802.29 and palladium eased 0.2% to $1,328.06.