Gold rose as high as $2386 earlier today but has since sagged back to $2372.
There is something of a ‘buy everything’ mode unfolding in stocks at the moment but the optimism hasn’t spread to gold. It trade above $2400 in April and May but has struggled to get back above. Last week it came close before a sharp drop lower on Monday, in part due to Chinese data showing the PBoC wasn’t buying.
However it impressively steadied today and took another run before the latest round of selling.
When I zoom out, there is clearly a period of consolidation unfolding following and impressive run in March/April. That’s generally promising, though the trade is to go-with a break of $2450 to the upside or $2275 to the downside.
Tomorrow’s US CPI report may go some way towards resolving that. A hot CPI report should weigh on gold while a sign of lower inflation would mean lower rates and should boost gold.
This article was written by Adam Button at www.forexlive.com.
