Gold

The first trading day contained strong bullish market sentiment for U.S. equities and dollar strength. The dollar gained 0.632 points or a percentage gain of 0.66%. Concurrently U.S. equities all traded to higher ground, with all three major indices closing near their record highs. The Dow Jones industrial average gained 246.76 points, a percentage gain of 0.68%.

It is getting to feel a lot like Christmas. Today market participants witnessed rallies across the financial markets. U.S. equities, precious metals, and cryptocurrencies all experienced gains today with a broad-based rally across most asset classes.

Both gold and silver had significant gains resulting from a combination of dollar weakness and continued fears regarding the economic effect of the Covid-19 variant omicron.

Today, we had a mixed bag in the precious metals markets, resulting in gold declining for the second consecutive day, and silver recovering and trading higher after yesterday’s decline. Yesterday, market participants in U.S. equities were solidly risk-off, taking all three major indices lower. Today U.S. equities reversed, scoring solid gains across-the-board.

As of 4:10 PM EST gold futures basis, the most active February 2021 Comex contract is currently fixed at $1789.80 after factoring in today’s net decline of $15.10 (-0.84%). Gold opened at $1800.20, traded to a high of $1804.60, and is currently trading $0.90 off the intraday low of $1789.

For the better part of the last 24 hours of trading, gold pricing has managed to trade above $1800. Gold futures traded to an intraday high today of $1815.70. However, with only 45 minutes left in Globex trading (New York trading has already closed) gold futures basis, the most active February 2021 Comex contract is trading up by $0.70 (+0.04%) and fixed at $1798.90.

As they say in real estate, it’s all about location. Yesterday judging by how gold and U.S. equities moved, it was not so much about the statement and dot plot, but it was all about Powell’s press conference. Gold had been trading lower before the release of the statement and dot plot trading to a low of $1753.

The Federal Reserve concluded the last FOMC meeting of the year capped off by a statement that contained a new “dot plot” which lays out their updated monetary policy through 2024. The last dot plot anticipated that there would only be one interest rate hike in 2022. However, that changed dramatically.

With less than 24 hours before the FOMC meeting concludes market participants continue to factor in a much more aggressive and hawkish stance on the part of the Federal Reserve to combat the spiraling level of inflation.