Gold Prices Pare Morning’s Loss

Although gold continues to trade under pressure as we go into the close of Monday’s trading session, prices have recovered from this morning’s lows. Gold prices sold off sharply today, with spot gold prices trading to an intraday low of $1219.49. As of 4:00 Eastern Standard Time, gold is trading at $1226.20, off $6.70 on the day. This lower pricing is a combination of sellers in the market as well as a strong US dollar. According to the KGX (Kitco Gold Index), $3.90 of today’s selloff can be directly attributed to normal trading with the remaining $2.80 attributable to a stronger US dollar.

US dollar strength is only moderately higher today with traders and investors waiting for Fed details on US consumer prices. According to Vassilis Karamanis of Bloomberg News, “Fed comments and details on U.S. consumer prices may reveal whether the dollar’s rebound this month is merely a corrective one or will extend to re-test highs seen in January.”

Traders Awaits Fed Direction as Janet Yellen Prepares to Speak on the Hill

Much of the selling pressure in the precious metals markets today is due to the uncertainty of the Federal Reserve’s next move. Traders and investors are awaiting some clarification from Janet Yellen as she prepares to speak to members of the Senate Banking Committee tomorrow, and then to the House Financial Services Committee on Wednesday.

In an interview with Bloomberg News today, Alan Binder, an economics professor at Princeton University, suggested that it’s likely that there might be some hint as to whether or not an interest rate hike will be initiated during the March FOMC meeting. Currently traders are putting a 30% probability that a rate hike will be initiated in March.

US Equities Trade to New Record High

With all the uncertainty surrounding the upcoming testimony by Janet Yellen on Hill beginning tomorrow, there seems to be absolute clarity, at least in the minds of investors and traders, as US equities rise to new all-time record highs. Today’s trading activity resulted in new record highs for five of the major indexes. The Dow, NASDAQ and the S&P 500 are, as usual, all included, but the Transports and the Russell 2000 joined the group today, with both indices trading to new record highs.

Wishing you as always, good trading,