If you are looking for some market action…just take a look at gold.

Gold prices went through the roof on Wednesday afternoon, gaining almost 2% as the dollar and Treasury yields tumbled following the US inflation report.

Consumer prices in the United States increased 5.4% year-over-year in September after advancing 5.3% on a year-on-year basis in August and 0.4% versus expectations for 0.3% on the month. Given how gold is seen as a hedge against inflation, prices could push higher in the near term – especially if Treasury yields continue to decline.

While the fundamentals remain a key component impacting gold prices, the technicals must not be overlooked with today’s sharp appreciation providing some fresh setups.

Same old story on monthly timeframe 

Zooming out on the monthly timeframe, gold remains in a wide range on the monthly charts with support at $1700 and resistance around $1915. Prices have oscillated within these regions since October 2020 with a massive directional catalyst needed for gold to resume or end its monthly uptrend.

Pressure building on weekly charts 

Some pressure seems to be building on the weekly timeframe with the range becoming tighter with each passing week. A breakout/down setup could be in the making with support at $1725 and resistance at $1834. The explosive jump in prices today may provide bulls with enough confidence to challenge the 50-week Simple Moving Average. If a weekly close above $1834 becomes reality, the next key point of interest can be found at $1916.5.

Bulls steal the show on daily 

Looking at the daily charts, prices have turned bullish. The solid break above the previous lower high around $1787 has placed bulls in a position of power. If the upside momentum holds, this could set the foundation for a move beyond $1800 with $1834 acting as the first key level of interest. Beyond here, bulls may eye the $1915-$1917 regions. Alternatively, a decline back below $1777 could suggest a selloff towards $1745.

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