A Hard Day’s Night for Gold Traders

“It's been a hard day's night, and I’ve been working like a dog. 

It's been a hard day's night, I should be sleeping like a log.” - The Beatles 

The phrase 'a hard day's night' was created accidentally by Ringo Starr, who often combined two phrases to create a new one.  This was his way of saying "I've had a tough day." I am sure many market analysts, myself included, feel exactly that way today.

Over the last 36 hours, a multitude of both financial and military events have exponentially ratcheted up the volatility factor. Last night (8:30 PM EST) the United States launched a defined and proportional air attack on Syria. Approximately 12 hours later (8:30 AM EST) the jobs report came out, with numbers well below analyst expectations. Add to this the American-Chinese summit, which concluded today, and you can see why market participants, investors, and analysts had ‘a tough day.'

Gold traded to a five-month high, with cash prices trading to 1271 intraday and futures trading to 1273. The Dow Jones Industrial Average opened softer today only to quickly turn around as investors shrugged off fears and bid up U.S. securities. By the afternoon, the U.S. dollar gained strength and trimmed the advance in gold prices. As of 2:30 PM Eastern Standard Time, cash gold is trading at 1256, up approximately three dollars on the day.

Gold Traders Experience a Roller Coaster Ride

Exhibiting extreme price swings over the last 36 hours, gold traders and investors experienced extreme volatility as gold quickly ran up to $1273 per ounce, only to sell off in the afternoon trading. Market analysts could not update their news stories quick enough, as huge price swings dominated gold prices.

“Gold was edging to the lower end of its recent range last evening, but the U.S. missile attack against the Syrian airbase turned the market in an instant, with gold popping as much as $20, before some profit taking set in,” stated Peter Hug, global trading director at Kitco.

According to Sue Chang of MarketWatch, “Gold futures finished with gains on Friday, but ended well off a five-month high set earlier in the session, as strength in the U.S. dollar and a rebound in stocks cut into the rally that followed U.S. airstrikes on Syria.

A much weaker-than-expected March jobs report had helped the yellow metal to extend gains, but the yellow metal pulled back later as the dollar rose.”

Once again it was all about the dollar. By afternoon, traders and market participants had recovered from the initial shell shock of the many events over the last 36 hours, and were once again focusing on risk-on  assets such as equities. The U.S. dollar, which had plunged to a five-month low against the Japanese yen, quickly recovered and the U.S. Dollar Index is currently up over a half a percent at 101.10.

On Monday, my daily commentary began with, “This week brings with it a multitude of events that will no doubt shape the future pricing of gold and silver.” What I forgot to include is that market analysts would be working like a dog by Friday, truly  ‘A Hard Day’s Night.'

Wishing you as always, good trading,