Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Gold Smashes Past $1,830 Wall in Inflation-Fueled Rally

CommoditiesJan 20, 2022 03:24
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Barani Krishnan - Gold’s doubters might be having second thoughts.

On Wednesday, the yellow metal smashed past the key $1,830-an-ounce resistance that had been the bugbear of longs in the market for almost two months.

Gold futures’ most active contract on New York’s Comex, February, settled up $30.80, or 1.7%, at $1,843.20. The session peak of $1,843.50 also marked a two-month high.

Technical charts indicated that Comex gold’s next stop could be $1,860.

“The $1,830 had been a major wall of resistance for gold longs and the successful demolition of it puts them on the strongest footing since November,” said Sunil Kumar Dixit, technical strategist at “So long as gold keeps above $1,825, then the $1,860 target is very possible.”

The near 4% rally in gold since the end of November has also lent a new glow to the yellow metal’s prowess as an inflation-hedging tool amid the worst U.S. price pressures in 40 years. In terms of absolute gain, Wednesday’s advance in Comex gold was the biggest in a day in more than a month — the previous being a 1.9% jump on Dec. 15.

Gold has always been branded as an inflation hedge but it failed to live up to that tag several times last year as the Dollar Index and U.S. Treasury yields rallied instead on expectations of rate hikes.

The Federal Reserve, or Fed, dropped interest rates to virtually zero after the outbreak of the coronavirus pandemic in March 2020, keeping them at between zero and 0.25% over the past 20 months. But officials at the central bank say a series of rate hikes will be needed now, to counter inflation as prices of almost everything have soared from the lows of the Covid-19 crisis due to trillions of dollars of pandemic relief spending, higher wage payout and supply chain disruptions.

News of rate hikes have typically been negative for gold, and this was somewhat reflected last year as the yellow metal closed 2021 down 3.6% for its first annual dip in three years, and for the sharpest slump since 2015.

But some analysts think that if the U.S. inflation theme remains strong through 2022, then gold could even retrace 2020’s record highs above $2,100 — a peak which, incidentally, came on the back of worries about price pressures as the United States began its biggest budget deficit with the onset of the pandemic.

“Given the calls for even more rate hikes this year than markets are pricing in, not to mention larger individual increases than we've seen for many years, perhaps we are seeing some inflation hedging from traders that don't think central banks are doing enough to bring price pressures down,” said Craig Erlam, analyst at online trading platform OANDA.

Gold Smashes Past $1,830 Wall in Inflation-Fueled Rally

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email