Meanwhile, China’s economy soared in the first quarter, with March retail sales expanding more than forecast.
After weeks of being confined to a narrow trading range, gold
climbed Thursday to the highest since February 26 amid the surge in Treasuries. Traders suggested foreign buying and geopolitical risks may have contributed to the bond rally, with many investors
caught positioned for further weakness.
Bullion was also supported this week after Federal Reserve Chairman Jerome Powell reiterated his dovish stance on monetary policy, although the robust economic data and record US equities have posed some headwinds.
“The sharp drop in Treasury yields in the face of strong US economic data has surprised traders paying attention to the reflation-driven bond sell-off in the last quarter,” said Avtar Sandu, senior manager (commodities), Phillip Futures.
“Although the long-term structural drivers that drove gold
to historic highs last year remain in the bigger picture, the fundamental drivers have seen its impact eroded by the opening up of economies. Green shoots are emerging in some of the Covid-19 ravaged countries as indicated by better economic activity.”
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