Gold

Gold regained a price above a key phycological level when it closed at $1800, up +0.4% in New York. As of 5:10 PM EDT gold futures basis, the most active December 2021 Comex contract was trading up $2.80 (+0.16%) and fixed at $1796.30. The precious metal traded to a high today of $1803.40 and a low of $1785.10. This is the first instance in the last three trading days in which gold has closed higher when compared to the previous day and traded to a higher low but a lower high.

As of 5:05 PM EDT gold futures basis, the most active December 2021 Comex contract is trading down $7.80 and fixed at $1790.70. This is the second consecutive day that we have seen a decline in pricing, although yesterday was a much more dramatic decline than today’s modest selloff. Considering the major new stories of the day it seems a little peculiar that gold would continue to trade under pressure. The following are some of the key events that occurred today.

On Friday, September 3, gold prices moved dramatically higher after the U.S. Labor Department released its jobs report for the month of August. Economists polled by Dow Jones and Bloomberg were anticipating that there would be an additional 700,000 to 750,000 new jobs added last month. However, the actual numbers came in far below the estimates, with the U.S. adding only 374,000 nonfarm payroll jobs in August.

The August job report was released today by the U.S. Labor Department is a game-changer. It clearly shows that the economic recovery, which had been strong, has taken at least one or two steps backward. This is directly due to the onset of the delta variant, which is much more transmissive has now encompassed the globe affecting millions upon millions of lives.

Unquestionably, tomorrow’s release of the U.S. Labor Department’s jobs report for August will be a critical component that will shape and determine adjustments to the current monetary policy of the Federal Reserve. It will be the last report the Federal Reserve will use to determine their monetary policy at this month’s FOMC meeting.

Gold pricing has remained fairly stable and continues to trade above $1800 per ounce. The clear break in gold occurred on Friday after Federal Reserve Chairman Jerome Powell spoke at the virtual Economic Symposium. Last Friday’s dynamic surge in gold took the precious yellow metal from its opening price of $1795 top close at approximately $1820. This single-day move took gold pricing above its 100 and 200-day moving averages.

The most recent Commitment of Traders (COT), which is published every Friday and lags one week behind real-time data, indicated that there has recently been a shift in market sentiment amongst money managers. The shift I am referring to is that the most recent report derived from data collected for the week of August 24. It clearly showed that money managers have been positioning themselves based on the assumption that gold is moving higher.

The Kansas City Fed sponsored Friday’s virtual speech with Chairman Powell at the Economic Symposium. There he indicated that the Federal Reserve had changed their demeanor to a more dovish stance concerning the onset to taper their monthly $120 billion asset purchases of U.S. Treasuries ($80 billion) and MBS or mortgage-backed securities ($40 billion).

Federal Reserve Chairman Jerome Powell spoke virtually at the economic symposium, a yearly event hosted by the Kansas City Fed. Traders and market participants have awaited his speech to glean more insight into the current sentiment of the Federal Reserve as it pertains to their highly accommodative monetary policy. The tone of his prepared remarks was construed as being more dovish than last month’s FOMC meeting.