Gold breaks $1800 on softer CPI

Gold had already created a post-NFP high at the start of this week, but with inflation data coming in much softer than the previous month, this has further fuelled a rally in low- and zero-yielding assets such as gold, nasdaq and yen.

Investors are betting that the Fed will slow down its rate hikes amid signs of slowing economic activity and the potential we have seen peak inflation. The big drop in crude oil and other commodity prices suggests inflationary pressures will weaken further in the coming months, which will reduce the odds of further 75 basis point hikes.

Gold has now climbed above $1800, a level which was our previous bullish target. If the breakout holds, $1830 could be the objective, which corresponds with the 38.2% Fib level. The 200-day average comes in around $1842.


By Fawad Razaqzada on behalf of FOREX.com
GoldTrend AnalysisXAUUSD

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