During early Friday trading the US dollar continued to shed some of the gains from earlier in the week, as one Fed official after another dismisses the threat posed by inflation as nothing more than a temporary supply and demand issue, that should not distract from the need to maintain accommodative policies to support the economic recovery. Investors appear to be listening and the initial reaction to Wednesday’s publication of higher-than-expected US CPI numbers is now fizzling out, with bond yields stabilizing and the greenback giving up some of its gains as the markets buy into the idea echoed by the Fed as well as other central bankers that any inflation surges won’t last.
Gold was moderately hit by the turmoil seen on the markets in the last few days as inflation fears and rising US yields pulled down bullion, along with the dollar’s recovery attempt. The scenario has now changed, with the market back in green and a new rebound of bullion. Technically, the decline found solid support at $1,810 with the price bouncing back to $1,830 with the overall outlook turning positive. A clear surpass of the resistance zone at $1,840-$1,842 would open space for further recoveries, with a potential target of $1,870.
Still on precious metals, palladium was hit more strongly by the correction, with the price falling to the support zone at $2,800. Palladium has now recovered to $2,910, albeit with a more fragile short-term technical scenario than the one for gold. Despite this, if we zoom out to the weekly chart, we are still in a clear bullish trajectory, thanks to the heavy buying of the last few weeks driven by deficit production fears. Strong resistance at the psychological level of $3,000 could curb the price skyrocketing.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.