By Barani Krishnan

Investing.com – It’s not progressing much from the weight of the soaring dollar and U.S. yields. But the fact it hasn’t collapsed either is giving gold bulls hope that the market still has the chance to get to $1,900 levels.

The price of gold has stuck around $1815 to $1870 for the week. Buyers sought out the yellow metal more than ever before the end June, as a hedge from inflation which is at its highest point in more than 30 year.

In Monday’s session, U.S. gold futures’ most active contract, , settled down $1.90, or 0.1%, at $1,866.50 an ounce. It peaked earlier in the day at $1,872.95 — its highest since June 15.

Gold futures settled up for a second straight week last week, notching a win of 2.8% after the previous week’s gain of 1.8%. The green also rose on the seventh day. This is the longest streak of green since the beginning of June.

“It’s been quite a run for gold, which has soared as inflation indicators have continued to rise and become more widespread,” said Craig Erlam, analyst at online trading platform OANDA. “This, in turn, has forced traders to price in more rate hikes even as central banks push back against it.”

Gold’s run-up was heightened by a Labor Department report last week that the U.S. Consumer Price Index, which represents a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% during the year to October. The CPI saw the fastest increase since November 1990. This acceleration was driven largely by fuel prices that have been at 7-year highs.

The inflation hedge that Bullion is known for has been around since its inception. But it wasn’t able to live up to that billing earlier this year as incessant speculation that the Federal Reserve will be forced in a faster-than-expected rate hike sent Treasury yields and the dollar rallying at bullion’s expense.

The trend has slowed somewhat since Fed Chair Jay Powell, earlier this month, assured that the central bank would be patient with rate increases that are only expected in the latter half of 2019.

But with the , a key indicator of real interest rates, hitting a three-week high of 1.62% on Monday and the reaching a 10-day peak of 95.46, fresh speculation emerged that the Fed may have to dump its “patient-for-now” stance over inflation and raise rates faster than its planned timeline of between July and December 2022.

But gold has not fallen.

“Gold has become popular despite higher yields and a stronger dollar, as inflation-adjusted yields remain at their lows,” Erlam of OANDA noted. “It’s also been seeing some love for its role as an inflation hedge, as we saw in the aftermath of the US CPI data last week. If policymakers continue to stick to the transitory line, gold could continue to see support.”

The last time gold traded was June at $1,900.

It reached record levels above $2,100 in august 2020, after rising from $1,500 below in March during the peak of the coronavirus epidemic.