Gold Prices Edge Higher Following Expected Inflation Growth

Key Insights

• Gold Prices Edged Higher
• The Dollar was largely stronger
• U.S. Treasury yields continued to climb
• Record inflation persists

Gold prices edge higher on Thursday as geopolitics continued to dominate the trading landscape. There does not seem to be any end to the carnage, and Russia is not backing down. Consumer inflation was reported in the U.S. on Thursday.

Inflation took center stage on Thursday. The U.S. Labor Department reported that the consumer price index increased 7.9% year over year, a fresh 40-year high. The February acceleration was the fastest pace since January 1982. On a month-over-month basis, the CPI gain was 0.8%. Expectations were for headline inflation to increase 7.8% for the year and 0.7% for the month.

Technical Analysis

Gold prices edged higher on Thursday and now appear rangebound. Support is near the 10-day moving average that comes in near $1,961. Resistance is seen near the March highs at $2,070. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal.

The medium-term momentum is positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram flattening, which likely points to consolidation.