A Rollercoaster Ride for Gold Investors and Traders This Week

The gold futures market experienced a rollercoaster ride this week, reaching historic highs before succumbing to a dramatic selloff. On Monday, the most active June 2024 contract opened at $2,422.20, soared to an intraday high of $2,454.20, and settled at a record-breaking $2,438.50. This momentous achievement, however, was short-lived.

Tuesday brought the first signs of turbulence, with gold declining by $12.60 or 0.52%, closing the June futures contract at $2,425.90. This fractional price drop was merely a prelude to the impending storm.

The catalyst for the substantial selloff arrived on Wednesday when the Federal Reserve released the minutes from its latest FOMC meeting. These minutes revealed that Fed officials were dissatisfied with recent inflation reports, casting doubt on the effectiveness of their monetary policy in bringing inflation swiftly to their 2% target.

"Participants...noted that they continued to expect that inflation would return to 2% over the medium term, but the disinflation would likely take longer than previously thought,"

Their pessimism in regards to their fight to bring inflation down was understandable in that during the first three months of 2024 inflationary data vis-à-vis the PCE and CPI indicated that inflation rose more than anticipated. The caveat to the minutes is that they occurred before this month’s CPI report for April revealed that inflation rose by a softer-than-expected 0.3% month over month, and 3.4% year-over-year.

Over the next two days, gold futures experienced the largest single-week decline of the year. Despite Monday's record-high price, the June contract settled $82.90 lower, a 3.43% drop for the week.

Adding to the downward pressure on gold prices was the strength of the U.S. dollar throughout the week. Although the dollar index declined by 0.27% today, closing at 104.763, even this bout of dollar weakness failed to lift gold futures, which settled $2.70 lower for the day at $2,334.50.

Chart This - Gold, Silver and Nvidia's 10-to-1 Stock Split - Recorded May 23, 2024 

Jeremy Szafron, Anchor at Kitco News, interviews Gary Wagner, Editor of thegoldforecast.com. they discuss the recent market movements of gold and silver, the strength of the U.S. dollar, and Nvidia's groundbreaking 10-to-1 stock split. Wagner shares his technical analysis on the technical indicators driving these markets, the potential future trajectories, and what investors should watch out for in the coming months. Discover why Nvidia's stock split is a game-changer for AI and how the current economic data impacts precious metals.

00:00 - Introduction and Market Overview 

01:35 - Dollar Index: Recent Trends and Analysis 

02:44 - Fed's Stance and Impact on Markets 

04:39 - Upcoming Economic Reports to Watch 

05:06 - Gold Prices and Dollar Relationship 

06:29 - Technical Analysis on Gold's Recent Pullback 

09:25 - Rate Cuts and Market Expectations 

09:52 - Silver Market Trends and Forecast 

11:44 - Key Price Points and Resistance Levels for Silver 

14:08 - Nvidia's Earnings Surge and Technical Chart Analysis 

18:52 - Macro Market Reactions and AI Impact

Market participants will have the extended three-day holiday weekend to reflect on the strong price decline in gold this week. Hopefully, the three-day holiday weekend offers the time to reflect on the fact that although gold declined by over 3% this week, it did trade to its record high on Monday.

Wishing you as always good trading,