Gold trading signaled to climb higher after the issue of inflation in the United States (US) was answered in the New York session last night.
The US annual inflation reading jumped again to a recent 40-year high of 8.5% versus 7.9% previously.
This factor has spurred the increase in the value of gold in the market overnight, after which the risk of investment in gold began to increase again as an asset classified as inflation-resistant.
On the XAU/USD price chart, which measures the value of gold versus the US dollar, it can be seen that prices continue to climb higher than the 19500.00 support level that had been successfully breached in previous gains.
Although the US dollar is also firm with expectations for the Federal Reserve (Fed) to continue its basic tightening steps after assessing the spike in inflation rates, gold still managed to make gains.
The price increase reached its high level in 1978.00 before shrinking and legalized in the 1970.00 zone so trading continues today.
Further gains are expected for gold to head to its next peg at 2000.00 and register a new 5-week high.
However, if the upward trend in prices fails to persist, the initial decline in gold prices below the support level of the MA50 and the level of 1950.00, will be an early indication for further price declines.
The target for the decline in gold prices is towards the support level at 1900.00 which was also the pillar of last March's trading.
Current market sentiment will continue to be monitored and important economic data will continue to be studied by investors to assess the current movement for gold.
