XAU/USD: Gold climbs above $1800 amidst increasing inflation fears

Gold prices climb above $1,800 as inflation does not appear to be transitory.

Gold prices rose back above $1,800 as inflation fears intensify. Twitter's CEO warned over the weekend that hyperinflation was imminent in the US, a statement that sparked much controversy. Nevertheless, the yellow metal is back above its pivotal level and is trading in a buying tone. 

Last Friday, the Federal Reserve Chairman spoke at a live event hosted by the South African central bank and said that it was time to reduce its asset purchases. This means that the Fed will make the official announcement at its meeting next week.

The news did not stop the stock market's upward trend, however. Indeed, the S&P 500 hit a new all-time high on Friday, and other stock indices also traded in a bullish tone.

In Europe, the new trading week started with the major indices trading slightly in the green. With US futures forecasting a flat opening, price action is slow so far in the European session.

Oil started the week with a new annual high. The price of WTI crude oil is up nearly 1%, trading well above $84.

Gold Price

Gold's price moved back above $1,800 after forming an inverse head and shoulders pattern. The price retested the front neckline, as it usually does after such a pattern, and then did not look back until it reached $1,800. This level has acted as a pivot for the yellow metal this year, so sellers could accumulate above this level.  A daily close above this level would signal more strength to come.