Gold is trading in different directions today. Investors continue to win back the CPI data for March published the day before.
The inflation indicators turned out to be higher than the forecasted values, which caused quite strong fluctuations in the market. The dollar sank heavily, and the yield curve for US bonds turned down. Maintaining an inverse correlation to these instruments, gold rallied on Tuesday.
The market's reaction was a bit unexpected, as the US dollar strengthened strongly in the 1st quarter and long-term bond yields rose to multi-month highs on expectations of increased inflationary pressures. Many investors were betting that the Fed would start phasing out the stimulus program earlier than it was announced. When the market did receive signals confirming the growth of inflation in the United States, the reaction was radically opposite. Apparently, the market was influenced by numerous statements of the FRS representatives, who convinced investors that the stimulating monetary policy would be implemented over a long period of time. The short-term rise in inflation does not pose a threat to the current policy of the Central Bank.
Gold is also boosted by news that the CDC and the FDA have suspended use of the Johnson & Johnson vaccine after six women who received it developed a rare and severe form of blood clotting. The pause is expected to last at least a few days.
In the afternoon, investors will follow the speeches of the heads of the world's two leading Central Banks - the Fed and the ECB.
Yesterday buyers were able to keep the price above the support at 1722.70. A new upward wave is developing on the chart. The price is testing the level of 1747.00 for strength. So far we have not seen a strong reaction to this level. With a high probability, we can expect a breakdown of this mark and the growth of quotations above 1755.00.
The main scenario is a breakdown of resistance at 1747.00 and growth above 1755.00.
An alternative scenario is a rollback to 1722.70 from current levels.
The current fundamental background is moderately positive. We are considering longs from the level of 1735.00
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