Gold is back in the hunt for $2400

Today’s US CPI report cracked open the door to Fed rate cuts once again today and has led to a broad round of US dollar selling. So it’s no surprise to see gold catch a bid in the aftermath, but how high can it go?

It’s up $31 today to a session high oat $2389.

In two different days in April, it had a peek above $2400 and even touched a high of $2431 before a nasty intraday reversal on April 12. In some markets, that would have signaled the end but gold has found a footing with the help of the Fed, Asian buyers and softer inflation.

The first level I’m watching is $2390, which was the record high close in April. If we can get a close above there, followed by one above $2400, then I’d be comfortable chasing the trend to a new all-time high.

Further confirmation would come from more US dollar selling and the euro in particular looks like it might be ready for another run at 1.10.

This article was written by Adam Button at www.forexlive.com.