Spot gold rebounds off the uptrend after U.S. Inflation jumps

June 11, 2021 - 2 weeks ago
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The precious yellow metal closed near session highs on Thursday, as investors assessed a bigger-than-expected climb in the U.S. Consumer Price Index (CPI) and figures showing claims by Americans for unemployment benefits reached their lowest since the start of the coronavirus outbreak.

U.S. headline inflation as measured by the Consumer Price Index (CPI) jumped again in May, marking its highest annual inflation rate since the summer of 2008 amid the economic recovery from the pandemic-triggered recession, the Labor Department said on Thursday.

U.S. (CPI), which represents a basket including food, energy, groceries, and prices across a spectrum of goods, rose 0.6% in May on a seasonally adjusted basis and was up a stunning 5.0% from a year ago, coming in hotter than consensus expectations.

The U.S. core (CPI), which excludes food and energy, was up 3.8% year on year, the highest since 1992.

Next Thursday, the U.S. Federal Reserve’s meeting (rate decision) is scheduled for June 15-16.

The statement will be closely scrutinised to see whether the Fed begins to believe that inflation is higher than expected or that the economy is strengthening enough to progress without much monetary support.

Regarding the technical assessment, unless we witness a close above $1,912, overall, the view holds to $1,855.

Above $1,912 gives a neutral perspective.

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