Gold surges as soft data trigger bets on Fed

Gold price surged to a peak of $1,987, up 1.35%, earlier in the North American trading session. The Gold Index (XAU/USD) rose to $1,985, indicating a bullish bias. The US Industrial Production figures were below forecast, and the number of jobless claims reached a three-month high. The precious metal is trading at $1982.34 at the time of writing.

US yields are plummeting rapidly, and weak US data suggested markets are betting on fewer chances of further tightening by the Fed. Initial Jobless Claims for the week ending November 10 increased to 231,000, surpassing the predicted 220,000. Industrial Production did not meet expectations for October, with a 0.3% decline and a 0.6% drop in MoM expected by the markets.

These unfavourable US economic figures triggered a decline in US Treasuries, which allowed the price to spike. The 2-year bond rate fell to 4.83%, and the 5 and 10-year yields declined by 4.43% and 4.45%, respectively.

As long as the US Dollar weakens and investors bet on a less aggressive Fed, the yellow metal could see further upside. The XAU/USD pair is above the 20,100,200-day Simple Moving Average (SMAs), suggesting that bulls are in control on the broader context.