Eight times per year, members of the Federal Reserve officially meet and hold their Federal Open Market Committee. The FOMC is composed of 12 members, seven of which comprise the board of governors, with the remaining five being presidents of Federal Reserve banks.

Market analysts and technicians have been consumed as they analyze the multiple factors that had created bearish pressure on both gold and silver pricing. Of all these factors, there are two intertwined factors that seem to have the greatest impact on creating negative market sentiment towards gold and silver. These are dollar strength, which is a direct result of rising yields for U.S.

Over the last few articles, we have spoken about the multiple factors that have created bearish pressure on both gold and silver pricing. Of all these factors, there are two that seem to have the greatest impact on creating a negative market sentiment towards the safe-haven assets, gold, and silver. These are dollar strength, a direct result of rising yields for U.S. Treasury bonds and notes.

After two days of substantial gains, we see both gold and silver consolidating at current pricing. This factor bodes well for the assumption that both precious metals, after sustaining an approximately 61.8% Fibonacci retracement from the highs achieved in August of last year, as potentially an area to find support and form a bottom.

Today the House Democrats passed their relief bill of nearly $2 trillion, encompassing every person and industry vastly affected by the Covid-19 pandemic. A few key things that will be included are a $1,400 check to all Americans making less than $80,000 a year and extending the jobless claims benefits to more people until September 6^th.

If you recall from yesterday’s article, I spoke about the fact that gold was facing selling pressure due to multiple asset vehicles directly competing with the investment dollars typically earmarked for that safe-haven asset (gold). Almost like the proverbial salmon swimming upstream, it is a difficult and grueling task; however, it is a task that can be accomplished.

It was a combination of U.S. dollar strength and market participants bidding the precious yellow metal lower that resulted in today’s substantial decline. As of 4:07 PM EST, gold futures basis, the most active April 2021 Comex contract is currently fixed at $1677.70 after factoring in today’s decline of $20.90 (1.23%). Spot gold prices also sold off with the same strong decline.

Not since the Spanish flu, which was also known as the 1918 influenza pandemic did a virus cause such harm on such a global basis. The Covid 19 pandemic which is now been with us for about a year has left every economy worldwide in upheaval sparing no country on earth.

You only need to look at the KGX (Kitco Gold Index) to see the dramatic effect that a surge in the value of the U.S. dollar had on gold. Currently, spot or physical gold is fixed at $1697.70, which is a $13 decline. Of that $13 decline, dollar strength accounted for $12.30, with the remaining $0.70 attributable to selling.

Gold futures got hammered today as they traded to a low of $1699.40 before recovering off the low and, as of 4 PM EST, is trading at $1713.50. The last time we have seen gold prices this low was in June 2020, roughly nine months ago. Spot or physical gold is currently fixed at $1714.10, according to the KGX (Kitco Gold Index).