Yellow metal prices were higher again on Thursday as the US dollar fell to a new low on the back of sliding US yields. Currently, XAU/USD is trading at $1,754.55 having burst from a low of $1,733.26 to a high of $1,758.72 on the day.
US Treasury yields were dropping again due to the fresh dovish comments from Federal Reserve Chair Jerome Powell. Also, worse-than-expected initial jobless claims that underlined the economy’s rough recovery from the covid-19 pandemic threw cold water over the US dollar’s bullish performance of late.
Economic data showed that initial claims for state unemployment benefits totaled a seasonally adjusted 744,000 for the week ended April 3, compared with 728,000 in the prior week. Continued unemployment claims though fell to 3.73 million for the week of March 27.
Meanwhile, at the International Monetary Fund event on Thursday, Fed’s Powell said a rise in spending as the US economy reopens, along with bottlenecks in supply, will likely push prices higher this year, but would not result in the kind of yearly price increases that would constitute inflation. The 10-year US Treasury yield dropped to a fresh low of 1.6280% and was ending on Wall Street down some 2.64%.
Fed’s Powell’s comments followed the wary Federal Open Market Committee minutes on the March policy meeting published on Wednesday whereby various participants noted that changes in the path of policy should be based mainly on observed results rather than forecasts.
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