14.04.202112:13 Forex Analysis & Reviews: Gold rebounds on inflation data and jumps by almost 1% on Tuesday

After an extended fall for 4 sessions in a row, gold attempted to recover on Tuesday. In just one day, its June futures contract added 0.9%, which is equal to $14.9. So, gold closed the session on the New York COMEX at $1,747.6.

The data on consumer inflation in the US contributed to the positive dynamics of gold. The released data has surpassed the previously announced forecasts. Thus, in March, the CPI rose by 0.6% on the back of higher oil prices, while analysts expected to see 0.5%. On an annual basis, the inflation rate reached its highest value since the summer of 2018, having risen from 1.7% to 2.6%.

As you can see, consumer prices in the US have been growing steadily for 4 months in a row, and the inflation rate in the country has approached the highest threshold in 2.5 years. The current situation is good for gold which is often used to minimize inflationary risks. Given the latest statistics, the attractiveness of the safe-haven asset has increased again, and its price has steadily gone up.

Meanwhile, Jason Teed, portfolio manager of the Gold Bullion Strategy Fund, assumes that the acceleration of inflation in the US is caused exclusively by the rise in fuel prices, and may be short-term. Therefore, gold may not extend its rally. It is still too early to talk about a long-term positive trend, analyst notes.

Meanwhile, the traditional asset is still under pressure from two factors that influence its pricing the most: the US dollar exchange rate and the rise in the US Treasury yields. On Tuesday, the bond yields fell sharply, thus triggering a reversal in gold. On Wednesday morning, however, the situation became exactly the opposite. Compared to the previous session, the yields of 10-year US government bonds rose to 1.627%, while the precious metal began to lose its value.

At the time of writing, gold was going through a downward correction. On COMEX, gold was last seen trading at $1,746.25 per troy ounce. The difference with the last close was $1.45, or 0.09%. Silver futures contract for May was also down. As of 06:00 GMT, its price reached $25.402. Silver closed the previous session at $25.43. The metal was able to gain 2.3% on Tuesday.