Breaking: Gold surges above $1,890, highest since January
|Gold has been benefiting from the risk-on mood in markets and has surged above the $1,890 level. At the time of writing, XAU/USD was trading at $1,891, rising 0.6% on a daily basis.
Federal Reserve officials have reiterated their message that the US economy has a long way to go and that inflation is transitory. That means the Fed is set to continue injecting markets with $120 billion of newly created cash every month and hold back on raising interest rates.
The latest trigger for gold's upside move came from the downbeat US data. New Home Sales disappointed with only 863,000 annualized in April while the Conference Board's Consumer Confidence Consumer Sentiment measure for May missed estimates with 117.2 points.
US Treasury yields are on the back foot, benefiting the yieldless precious metal. Returns on 10-year Treasuries have dropped to 1.57%. The US economy is recovery rapidly, but also facing shortages and skill mismatches among workers. That is slowing the recovery and pushing the Fed to more expansionary policy.
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