According to the Associated Press, on Saturday the Iranian-backed Houthi rebels launched a drone attack against the world’s largest oil processing facility and a major oilfield in Saudi Arabia.

Risk-On Market Sentiment Pressures Gold and Silver

As of 4:11 PM EDT gold futures have maintained a price above $1500 per ounce, with the December Comex contract currently at $1506, a net gain of $2.80 on the day. However, it is not today’s net gain that got the attention of market participants, but rather the wild price swings that developed as fundamental events unfolded.

Editor’s Note; today’s video report is a special edition of the Gold Forecast, Part 2 (part one was yesterday) in which we will look at current pricing through the eyes of an Elliott wave model.

Now for the fourth consecutive day gold futures have traded lower, in today’s case moderately lower. As of 4:26 PM EDT, December futures are currently trading at $1494.80, after factoring in the current decline of $16.30. Considering that on September 5 gold had opened up at just over $1560 per ounce, this current decline might be of short duration, but it has taken pricing over $65 lower.

It has been selling that has dominated today’s lower pricing in both gold and silver, with the U.S. dollar actually weakening giving both precious metals a small tailwind. As of 4:34 PM EDT physical gold is currently down $7.60, and fixed at $1498.90.

Chairman Jerome Powell spoke at an event hosted by the Swiss Institute of International studies, in Zürich Switzerland. His outlook for the economy was positive stating that today’s U.S. Labor Department report indicated that the U.S. economy in terms of employment is healthy. He also said that his future outlook is likely to highlight his belief of continued expansion.

A Call from Vice Premier Liu He to U.S. Trade Representative Robert Lighthizer has set the stage for a resumption of talks. The ADP jobs report for the private sector came in at a robust 195,000 new jobs added in August. The ADP jobs report is giving market participants an indication that tomorrow’s Labor Department nonfarm payroll jobs report will also be a robust number.

Although both gold and silver traded higher on the day, it was silver that outperformed gold by over 4 to 1. Both precious metals were aided by a falling U.S. dollar which is down by .59%.

Typically, a market with extreme bullish sentiment trades to new highs, but also has period of market consolidation or a shallow correction before returning to a bullish rally. It also will typically trade to a new high.