Gold rallies on Thursday session as CPI disappoints

Gold markets rallied significantly during the trading session on Thursday, as CPI disappointed. The market broke through the vital $1315 region, an area that has been resistance over the last several sessions. As the US dollar fell, Gold rallied which of course is a very common reaction. · FX Empire

Christopher Lewis

Updated Thu, May 10, 2018, 10:20 PM

Gold markets broke out during the trading session on Thursday, reaching as high as $1323 before rolling over again. However, there should be a bit of support near the $1315 level, an area that has been resistance over the last several sessions. As I record this, we are just above that area and testing it for support. If we bounce back above the $1320 level, the market is more than likely going to continue the upward momentum, as we have seen a lot of resiliency in this market. In the meantime, expect a lot of volatility, because quite frankly there is a lot of question about whether inflation is picking up or not. The Federal Reserve is likely to raise interest rates, and that of course works against gold as it strengthens the greenback. However, there are plenty of other reasons why gold may go higher.

There are of course is the geopolitical concerns, especially considering the saber rattling between the United States and Iran lately, and of course Israeli missiles flying hasn’t calmed the situation down either. At this point though, I think the US dollar is a bigger driver, so pay attention to that. I think that people are starting to look at this market as being structurally bullish, least in the short term, so I would not be surprised at all to see the buyers come back and push towards the $1330 level, and then eventually the $1350 level. Expect a lot of choppiness, but I do think that the buyers are starting to flex their muscles.