Gold quotes are actively growing during the trading session on Thursday. Since the opening of the day, XAU / USD has added 0.3% and is trading at $ 1,782 per troy ounce.
Investors expect the development of the situation with the stimulus package for the US economy at $ 1.9 trillion. It is predicted that the approval of such an expensive program, taking into account the current situation in the US domestic market, will lead to a noticeable increase in inflationary pressures. Another proof of rising inflationary expectations is the current situation in the US Treasury market, which is breaking local records. In particular, the US government debt market - the largest on the planet and equal in size to a quarter of world GDP - is experiencing a sell-off that it has not seen for at least 7 years.
Treasury bond prices are falling rapidly and yields are rising amid accelerating global inflation, which has made traders fearful that global regulators will have to roll back zero interest rates. The yield on 10-year US securities, which in summer fell to a historic low of 0.59% per annum, soared to 1.3% and renewed its annual maximum. The yield on 30-year bonds rose from 1.2% in August to 1.65%, and by mid-February, for the first time in 12 months, exceeded the 2% target. The growth of the consumer price index in the US accelerated 7 times in 9 months - from 0.2% to 1.4%. Market participants, expecting an even greater acceleration of inflation, are trying to find tools that can become a safe haven against the background of the projected dollar depreciation. Since gold is a classic inflation hedge,
Potential weakening of the dollar is also on the side of gold buyers after the US Congress approves new fiscal stimulus measures. Recall that the adoption of similar measures to support the economy in mid-2020 led to the development of a stable bearish trend in the USD index. The situation may well repeat itself this time.
XAU/USD BuyStop 1785 TP 1840 SL 1770
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