Spot gold rose on Thursday as a weaker US dollar and falling US Treasury yields boosted the allure of bullion.
Spot gold rose to $1,760 an ounce for the first time since February 26, hitting a high of $1,766.72 an ounce, up about 1.7 percent on the day.
Earlier in the day, there were three waves of heavy trading in gold, with the huge amounts of money pushing the price sharply higher.
Data show that the COMEX most active gold futures contract at 20:08 Hong Kong time on April 15 within one minute, the trading floor instantly transacted 2,178 lots, the total value of the contract 381 million US dollars; At 21:33 Hong Kong time on April 15, a total of 2,165 deals worth US $380 million were sold within one minute. At 22:08 Hong Kong time on April 15, 3,323 lots of contracts worth $585 million were sold in a single minute.
Data from the US Commerce Department showed retail sales rose 9.8 per cent month on month in March, against expectations of 5.8 per cent, rebounding from a 2.7 per cent drop the previous month and the biggest gain since May last year.
Bloomberg said $1,400 bailout checks to individuals and strong job growth last month could explain why retail sales rebounded so strongly in March. Increased vaccination and loosening of vaccination restrictions are also likely to support sales, particularly in retail categories that are most affected by social distance restrictions.
Meanwhile, the Labor Department said 576,000 Americans filed new claims for state unemployment benefits in the week ended April 10, the lowest since the week ended March 14, 2007, well below expectations of 700,000 and sharply below the previous level of 744,000.
Fed Chairman Colin Powell said on Wednesday that the central bank would cut its monthly bond purchases before committing to a rate hike and that it was still months or even years away from figuring out the order of monetary policy changes.
In addition, news about the geopolitical situation between the U.S. and Russia also caught the market’s attention.
The United States has imposed a series of sanctions on Russia to punish it for alleged interference in the U.S. election, cyber hacking, intimidation of Ukraine and other “malicious” actions.
The measures blacklisted Russian companies, expelled Russian diplomats and placed restrictions on the country’s sovereign debt markets. The Biden administration has indicated that more punitive measures are likely, although the United States does not want to escalate the situation.
Russia reacted angrily, calling the move a dangerous escalation of tensions between the two countries. It summoned the US ambassador for what it said would be a difficult conversation.
The combined impact of the news sent the dollar to a four-week low, making gold cheaper for investors holding other currencies, while weaker yields on benchmark 10-year U.S. Treasury notes further boosted gold’s appeal.
“Gold is doing pretty well today… We’ve seen weakness in the dollar as well as weakness in US 10-year yields, “said Michael Hewson, chief market analyst at CMC Markets UK.
“The big question now is whether we can get out of the highs we hit last week, near the 50-day moving average, which is currently limiting the rally.”
“However, the lack of support from financial investors has prevented gold from achieving any further significant and sustainable gains. Gold ETFs still show no signs of a trend reversal, “analysts at Commerzbank said in a note.