By Barani Krishnan

Gold rebounded from its two-day losses and closed at the highest level since June. This once again made skeptics skeptical of the possibility that gold could be on the verge of recovering the $1.900 mark desired by bullion investors.

U.S. gold futures’ most active contract, , settled Wednesday’s session up $16.10, or almost 1%, at $1,870.20 an ounce.

That was the highest settlement for a benchmark gold futures contract on New York’s COMEX since June 11, when the close was $1,879.60. In fact, December gold reached a 5-month high of $1.879.35 the week before.

This was also an affirmation of sorts for the gold bulls who seemed to be on better ground than they had been since the beginning of this week.

December gold plunged almost $30 from Tuesday’s peak, capping a two-day downturn, after a seven-day run-up that boosted the contract by almost 5%.

Wednesday’s turn-around had re-established gold’s charge toward the $1,900 area, said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.

“It appears very much on its way to the target of $1,900-$1,916,” said Dixit. “The stars are aligned for gold, so long as it holds above $1,860 and the U.S. inflation picture serves as the backdrop theme.”

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 intense speculation that the Federal Reserve will be forced in a faster-than-expected rate hike had sent Treasury yields and the dollar rallying instead, at bullion’s expense.

This trend has been somewhat reversed after Fed Chair Jay Powell stated earlier in the month that the central banking will remain patient as it considers any rate increases. These will occur only after the second half of next year.

Last week, the Labor Department reported that the U.S. Consumer Price Index (which measures a range of products including gasoline, health care, groceries, and rents) rose 6.2% in the 12 months to October. This was the highest growth in the CPI since November 1990. Its acceleration was mainly due to fuel pump prices at their seven-year peak.

The, which is a crucial indicator of real interest rates has seen three-week highs of above 1.6%, and a peak of 95.85 for 16 months. This would normally have meant that gold was doomed. However, the yellow metal survived these threats.