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Gold Prices Threatened by UK Inflation Spike: Will Bearish Momentum Prevail?

Gold Prices Threatened by UK Inflation Spike: Will Bearish Momentum Prevail?
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  1. Gold threatening to break lower as UK inflation spikes again

    Gold threatening to break lower as UK inflation spikes again

    Gold prices came under some pressure on Tuesday, taking the prices back to the lower end of its recent range and even threatening to break below in what could have been a bearish development for the yellow metal.

    Gold has broadly traded between $1,940-$1,980 over the last month, very briefly moving outside of this range on a few occasions and the lower boundary is being tested once again this morning. It actually fell below $1,930 yesterday and nearly did the same again this morning so traders will be on high alert for a more substantial breakout to the downside.

    Higher yields could be the catalyst for that depending on how traders more broadly respond to this morning’s disappointing UK inflation data. Is it a sign of a deeper problem in the global fight against inflation or just UK-specific? The dip after the release suggests the concerns around the former.

     


    Craig Erlam

    Craig Erlam

    Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.


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