Gold rose to its highest level in more than four months today, as the dollar and US Treasury yields declined after US consumer confidence data showed a slight decline in May. Spot gold rose about 1% to $ 1895.95 an ounce, its highest level since the 8th of January, while gold futures rose to $ 1896.66 an ounce.
The data showed the US consumer confidence index for May declined to 117.2, while the one-year US consumer inflation forecast rose to 6.5%. According to some analysts, with declining consumer confidence, some may think that the Fed will be more pessimistic for a longer period now, and with weaker consumer confidence and higher inflation expectations, this may mean that the Fed will allow more inflation than previously anticipated.
The dollar index fell to its lowest level in four and a half months, at a time when bond yields touched their lowest levels in two weeks, dulling the opportunity cost of owning gold without interest. Fed policymakers in separate statements played down inflation concerns and assured that the current easing monetary policy will remain unchanged.
Currently, it seems that the opportunity for gold to continue rising to reach the levels of $ 2,000 exists during the second half of 2021, but in the short term, levels of $ 1,900 will be the next target, before targeting levels of $ 1,960 an ounce in the medium term.