Gold exhibited heavy volatility on Thursday, as the announcement of the CPI data sent mixed signals for the price of gold. On one hand, soaring inflation rates boost the price of gold, which is often used as an inflation hedge. On the other hand, rising treasury yields tend to push the price of gold down, since they are interest-bearing assets and are seen as a more appealing investment.
Gold price climbed above $1,841 per ounce early on Thursday but retreated later in the day and is currently testing the $1,829 per ounce resistance. If the price of gold continues its ascend, it may find further resistance at $1,853 per ounce, while if it decreases, support may be found at 1,782 per ounce.
An escalation of the Russia-Ukraine crisis might also boost the price of gold, as investors might turn to safe-haven assets. Geopolitical tensions might also drive the price of other commodities up, especially energy-related assets, further increasing inflation. The increase in oil price in recent months has also been driving inflation up, benefitting gold prices.
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