• Bullion prices reach fresh one-month highs at $1,800.
  • US dollar weakness and inflation concerns boost gold’s rally.
  • XAU/USD: Next targets might be $1,807 and $1,830.

Gold futures’ appreciated for the third consecutive day on Thursday, favored by a somewhat softer dollar, to reach fresh one-month highs at $1,800 before consolidating above $1,790.

Gold rallies further as the USD loses ground

Bullion ticked up about $1 to it $1,800 for the first time since mid-September, on the back of a retreating US dollar, weighed by a flattening US yields curve. Long Term Treasury yields have retreated sharply over the last three days, with the yield of the 10-year note down to 1.52% after peaking above 1.60% earlier this week, while shorter-term yields surge to multi-month lows amid expectations that the Fed will soon announce the end of its QE program.

Furthermore, increasing concerns about the growing inflationary pressures are starting to translate into higher demand for gold, a traditional inflation hedge. Chinese producer prices surged to a 26-year high in September with a 10.7% increase year-on-year, which has reactivated concerns about the risks of stagflation. Earlier this week, US Consumer Prices accelerated to a 13-year high, confirming persistent consumer inflation and increasing pressure on the Federal Reserve to start normalizing its monetary policy.

XAU/USD, aimed to $1,807 on track to $1,830

From a technical perspective, gold prices have regained bullish momentum to attempt an assault to $1,807 (Sept. 15 high) ahead of $1.830 July and September’s peak. If that level is surpassed, the next potential target might be June 8 and 11 highs at $1,905.

On the downside, the pair remains supported above previous weeks’ highs at $1,70, with next potential support areas at $1,745 (October 6 low) and below here, a key support area at $1,725 (September 29, 30 low).

Technical levels to watch