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The gold market was under some pressure earlier in the session. Following the June CPI print, gold moved rapidly lower down to a level of $1707. The metal quickly reversed, however, and now is up sharply on the day by nearly $15 per ounce. Despite the numerous bearish issues gold currently faces, the bulls have done a good job of absorbing the selling pressure. This could bode well for gold in the medium and long-term and may lead to an eventual reversal and rally on the daily chart.

The release of the Consumer Price Index data, unveiled earlier today, may become a serious anxiety-producer for equity market bulls. The reading for June CPI came in hot, and even hotter than expected with a year-over-year reading of 9.1%. The blistering, 40-year high for inflation may have some adjust their thinking about the Fed and interest rates. There is now an excellent chance the Fed will see fit to hike another 75-basis points later this month. Expectations for a larger increase, such as 100bps, may now be on the rise as well.

The hotter than expected CPI figures do not coincide with some lower commodity prices, such as crude oil. A lower basket of commodities may have fed the notion that inflation could have already peaked. Data like today’s, however, could tell a very different story.

Outside market action today is bearish for gold. Crude oil is lower again today, currently trading around the $95 per barrel level. The dollar hit a fresh 20-year high and yields climbed significantly in the aftermath of the CPI release. Ten-Year Notes are now fetching over 3% again and could be poised to rise further in the days ahead.

The bears remain in control on the daily chart. The bulls have significant work to be done, and their first order of business mahy be to produce a close above resistance at the $1800 level. The bears will look to push prices lower and produce a close below the $1700 area.

The gold market remains in neutral territory, although the bears have clearly demonstrated their poise at this point. With the bulls absorbing all of the selling thus far, however, it begs the question of who may win the current tug of war. That will likely come down to a few factors. Has inflation begun to peak already? Will the Fed have to remain very aggressive? Could the war in Ukraine come to a close anytime soon? These are all questions that may need to be answered before gold finds its footing one way or the other. In the meantime, the bulls are likely to keep accumulating gold as its long-term bullish narrative remains unchanged. For those that are focused on the long-term value rather than the short-term fluctuations, gold may represent an excellent value at current price levels which may not be seen again once the market takes off.