Market participants are once again focused upon the real threat that faces global economies, spiraling inflation. Today the United Kingdom reported that inflation has now hit a 10-year high. In the United States, the current level of inflation is at a 31-year high coming in at 6.2%.

Gold futures traded to a high of $1879.50 overseas last night but then fell sharply off of these highs as the U.S. Census Bureau announced the advanced estimate of retail and food services sales for October 2021. Concurrently, the Federal Reserve released its industrial production data for October.

Higher yields in the U.S. Treasury notes were a primary factor taking the U.S. dollar higher, which in turn pressured gold to close lower on the day. This is the first instance in which gold has closed lower in the last eight consecutive trading days.

While gold has traded to a higher high, a higher low, and higher close than yesterday, the key is that it has been consolidating right beneath a critical area of resistance. The price point that I’m speaking about is the 78% Fibonacci retracement that occurs at $1867.50.

Market participants might have been numbed by the government's release of the October inflation rate which came in well above economists polled by the Wall Street Journal. However, the same market participants have seen prices rise dramatically over this last year especially energy and food costs.

Yesterday’s article addressed whether or not gold was positioned for a large upside breakout. We cited that the upcoming CPI (Consumer Price Index) numbers which were released today, would be a huge component to answer that question. Our technical studies indicated that a break in gold futures above $1835 would be a trigger for a strong breakout or price search.

With the recent rise in inflationary pressures, and the consumer price index numbers being reported for October tomorrow Federal Reserve members have differences in regards to interest rate hikes next year.

Now for the third day in a row, gold has scored significant gains. As of 4:25 PM EST gold futures basis, the most active December contract is currently up $9.50, or 0.53%, and fixed at $1826.40. Silver has also shown significant gains today, with the most active December contract up $0.388, or 1.61%, and is currently fixed at $24.545.

“Come writers and critics who prophesize with your pen, and keep your eyes wide, the chance won't come again, and don't speak too soon, for the wheel's still in spin”  -- The Times They Are A-Changin' -- Bob Dylan

Gold prices surged in trading as the Bank of England joined the central bank of the United States, expressing that they were not in favor of raising interest rates at any time in the near future. During Chairman Jerome Powell's press conference yesterday, he made it clear that they're not even thinking about, thinking about raising rates anytime soon.