U.S. Treasuries pared gains on Thursday after the weak auction of the 30-year bonds, the last of three Treasury coupon sales this week.
The Treasury auctioned $16 billion in 30-year notes at a high yield of 3.652 percent. The bid-to-cover ratio, an indicator of demand, was 2.11.
"Following a slew of mediocre Treasury auctions over the past two weeks, the just released results from the 30-year bond auction was very weak," said Peter Boockvar, chief market analyst at The Lindsey Group.
"Bottom line, I can only guess that the greater prospect of a Fed pullback in coming months helped to dissuade buyers as if the Fed is about to start buying less, why should others buy more," Boockvar added.
On the open market, benchmark 10-year Treasury notes were up 7/32 in price to yield 2.587 percent. The 10-year yield hit 2.573 percent earlier, the lowest level since July 31, according to Reuters data.
The 30-year bond was 7/32 higher with a yield of 3.673 percent. The 30-year yield has traded in a 26 basis-point range since early July.
U.S. Treasurys prices rose earlier on Thursday, with benchmark yields hitting their lowest in a week, as investors' appetite for bonds improved further ahead of the auction.
The short-term view on Treasurys has turned more positive following solid demand at the $32 billion three-year and $24 billion 10-year note auctions, the other legs of this week's August quarterly refunding, traders and analysts said.
Still, worries that the Federal Reserve might pare its $85 billion monthly purchases of Treasurys and mortgage-backed securities as early as September have capped market gains. Recent data and remarks from top Fed officials have supported the notion the central bank was on track to dial back its bond-purchase stimulus.
Domestic first-time filings for unemployment benefits edged up to 333,000 last week from a 5½ year low the previous week, while the four-week average of jobless claims fell to its lowest level since November 2007.
(Read more: US claims rise, but hope abounds for labor market)
These levels of claims reinforced the perception of moderate job growth, which might be enough for the Fed to shrink its monthly bond purchases, according to some economists. In the meantime, the Fed bought $3.22 billion in Treasuries that will mature in August 2020 to November 2022.
—CNBC with Reuters