According to the Federal Reserve’s website, “Forward guidance is a tool that central banks use to provide communication to the public about the likely future course of monetary policy. When central banks provide forward guidance, individuals and businesses will use this information in making decisions about spending and investments.

There continue to be strong headwinds created by multiple financial asset classes which have continued to pressure gold pricing. As of 4:19 PM EST gold futures basis, the most active August 2021 Comex contract is fixed at $1802.30, which is a net decline of $3.20 (-0,18%).

In overseas trading last night, gold traded to a critical support level that occurs at $1793.70, which is based upon the 100-day moving average. Gold futures traded to a low today of $1791 which is a few dollars below this technical support level.

Gold is undoubtedly swimming against strong currents, which are curtailing any move to the upside. Recently it has been struggling successfully to stay above $1800 per ounce. On Monday as well as today, gold prices came close to testing the 100-day moving average, which is currently at $1792.10, and on both occasions closed just above $1800.

Today gold futures closed fractionally higher. As of 4:55 PM EST the most active August 2021, Comex contract gained $1.20 and is currently fixed at $1810.40. What is most noteworthy on a technical basis over the last two trading days is that yesterday gold futures came close to testing support which occurs at $1791.40, the 100-day moving average.

It is a well-known fact that gold prices are extremely sensitive to the rise or fall of 10-year Treasury yields. The higher the yield in the 10-year note (interest paid to the purchaser) has an inverse correlation to the price of gold. That means as yields rise in the U.S. debt instruments, it pressures gold to lower pricing. Inversely as yields drop in U.S.

It seems, at least for today, equities traders are focusing upon rising inflation, while gold traders are largely ignoring the recent data. This is the polar opposite of what we have seen throughout the week, with equity investors largely ignoring the historically high CPI data (Consumer Price Index) that was released earlier this week by the U.S. Bureau of Labor Statistics.

After yesterday’s dramatic gain of $18 in gold futures, today we saw follow-through with an additional $5.30 added to the price of gold futures. As of 5:55 PM EST, the most active August 2021 Comex contract is fixed at $1830.30 after factoring in today’s gain of $5.30.

There is absolutely no question, inflation by all measures is running higher than expected. In fact, Chairman Powell today acknowledged that inflation is above what the Federal Reserve is hoping to see. However, he tempered that statement by saying that this level of inflation will “moderate.”

One might think that recent data would have moved gold solidly higher, and gold would be able to maintain those price gains. However, nothing seems further from the truth.