Gold jumped more than 4% yesterday through major resistances

Precious Metals gained some speed yesterday. August Gold (gcq8) jumped more than 4% and broke at the same time the $865-912 range holding for a month. It is a significant move as it opens the way to $935-940. A daily close above $967 will imply a retest of the $1000 level at least . We continue to prefer the Long side as we expectfurther USD weakness.

"There is the risk that while the Federal Reserve has to an extent 'talked the talk' regarding inflation, it is failing to 'walk the walk' by raising interest rates in order to combat the real threat posed by surging inflation," wrote Mark O'Byrne, executive director of Gold and Silver Investments Ltd., in a research note. Inflation in the U.S. remains higher than interest rates and continuing negative real interest rates could lead to an "inflationary spiral," he said. That "will likely lead to sharply increased investment demand for gold to hedge against burgeoning stagflation," O'Byrne said.