Gold prices surged past the $2,359 mark on Tuesday following data from the US Department of Labor indicating that factory gate inflation exceeded expectations, suggesting that prices remain elevated. Despite the inflationary pressures, US Treasury yields fell, posing a challenge for the US Dollar.
Federal Reserve (Fed) Chair Jerome Powell made notable remarks after the Producer Price Index (PPI) report’s release. He acknowledged that while he expects inflation to continue its downward trend, his confidence in the disinflation outlook has waned compared to earlier projections. Powell also highlighted that the Gross Domestic Product (GDP) is anticipated to grow by 2% or more, supported by the robust labor market.
Currently, the XAU/USD trades at $2,359, marking a 0.97% increase. The US Bureau of Labor Statistics (BLS) reported that producer prices rose above estimates, with only one measure aligning with economists’ predictions. Initially, US Treasury yields spiked to a daily high of 4.534%, but they later reversed course, contributing to the positive momentum for gold.
