Hotter-than-expected UK inflation isn’t really benefiting the pound as much as it is the dollar at the moment it would seem. The report here is posing fresh questions to broader markets as to whether inflation is going to continue to be a problem in the months ahead, after having been brushed aside in recent weeks.
In the context of the UK, food inflation remains a major problem with prices still seen up by 19.1% year-on-year. That is the fastest annual rate in food prices in 45 years. Ouch.
Equities have taken a knock as bond yields rise higher on the day now. The latter is weighing on gold while also benefiting the dollar as we see price fall back below $2,000 at the moment.
The high yesterday for gold was limited around the 200-hour moving average (blue line) and that sees sellers keep near-term control. However, there is still support from the 10 April low at $1,981 and that will be a key line in the sand to watch as the dollar push and pull continues in trading this week.