Gold inches higher as inflation surges
Holmes points to golden cross chart event as bullish indicator for yellow metal

(USAGOLD – 7/13/2021) – Gold inched higher this morning after the Labor Department reported a 5.4% surge in inflation – well above expectations in the 4.9% range and the 4.8% inflation expectations figure released just yesterday. It is up $3 at $1811.50. Silver is down 13¢ at $26.30. Tomorrow the Labor Department releases its producer price report and Fed chair Powell will begin a two-day appearance before Congress. Not even a less than encouraging inflation report seems enough, at this juncture, to shake the precious metals out of their summer lethargy. Analyst Frank Holmes, though, remains optimistic.

“Gold,” he says in an article posted at Investing.com, “notched its third straight week of higher prices as the yield on the 10-year Treasury dipped below 1.3% for the first time since February. The highly transmissible Delta variant was also ruled the most dominant strain of coronavirus in the U.S., threatening economic growth and raising uncertainty about the next interest rate hike. Against this backdrop, the yellow metal is now flashing a golden cross, meaning the 50-day moving average is trading above the 200-day moving average. (Please see our Chart of the Day below.) In the past, this has been a bullish indicator for gold prices, which are still off some 12% from their all-time highs set last summer. In the short to medium term, it appears as if gold demand will continue to be driven by central bank policy, which should remain accommodative even as inflation fears increase.”

Chart of the Day

Gold Price
(Gold price, 50-day and 200-day moving averages)
Overlay chart showing the 50-day and 200-day averages crossing – a bulliish indicator

Chart courtesy of BarChart.com • • • Click to enlarge

Chart note: Please see Frank Holmes’ comments in today’s DMR above.

 

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