Gold is halfway to an all-time high

The price of gold broke an important resistance zone of 1833 yesterday, after a high print of the US inflation of 6.2% that is the highest since 1990. High inflation brings concerns about higher interest rates sooner than expected. On the other hand, the structure of the inflation may show that it is not temporary as suggested by the Fed officials. High and persisting inflation is good for the gold bulls due to concerns about losing the value of money.

We can notice on the chart that the gold is halfway to an all-time high, looking from the perspective of recent correction from August 2020 to March 2021. The price broke the major downward trend line and tested another one with 50.0 Fibonacci retracement of the mentioned downward wave. After possible breaking, the way to 1900 will be open. On the other hand, a sharp gain of yields may subdue rally on gold, especially when a communication from the Fed will strengthen. Sellers should defend resistance at 50.0 Fibo and buyers want to stay above 1833.