Gold prices gain as inflation concerns grow

A very strange situation in the market. Inflation in the US exceeds 6%, which increases the chances of further Fed actions. This leads to a breach of key gold resistance at $ 1,833 an ounce. Gold is currently trading $ 10 higher, and all the upward movement is a result of the inflation reading. Thus, gold price reached its highest level since June.

What caused this movement? Gold does not protect against large and sudden inflationary spikes. On the other hand, as inflation expectations begin to rise and pave the way to sustained high inflation, at such times gold may also gain, even despite falling bond yields.

Gold breaks above key resistance. Source: xStation5