Gold Rallies Ahead of U.S. CPI Report

Gold prices increased for a third consecutive trading session, rising 0.9%. The dollar was lower, which helped buoy the yellow metal. U.S. Treasury yields were slightly higher, but the 2-year yield settled near the lows of the trading session. Fed Chair Jerome Powell spoke today in front of the Senate as part of the confirmation process for a second term. On Wednesday, the Labor Department will release its Consumer Price Index. Expectations are for a 7% headline figure year over year.

Technical Analysis

Gold prices rallied for a third consecutive trading session. Resistance is seen near a downward sloping trend line that comes in near $1,823. Support is seen near the 200-day moving average at 1,800.   Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index has generated a crossover buy signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Consumers Expect Higher Inflation

The December 2021 Survey of Consumer Expectations was conducted by the Center for Microeconomic Data at the Federal Reserve Bank of New York. The results show that consumers expected inflation to average 6.0% over the next 12 months and 4.0% over the next three years.