Gold higher following US inflation data, lower bond yields

Gold daily update


Gold daily update

Gold prices have strengthened in the past 24 hours following US inflation data. While the February consumer price index met expectations (2.2%), key components such as rental and healthcare costs showed slowing growth. As a result, the outlook for future inflation is weaker. US Treasury yields fell after the data was announced, while the US dollar sold off. Unsurprisingly, gold powered higher. Looking at 10-year US Treasuries, the bonds are currently yielding 2.835% after peaking above 2.90% earlier this week. Today, the precious metal is taking a breather and is currently trading sideways. We expect gold to keep strengthening as long as prevailing economic conditions remain in place. Our short-term outlook on gold is neutral, while our medium-term outlook remains bullish. 

After its most recent top around $1,340, gold is now above $1,325.