Gold

Gold is consolidating following the most considerable one-day price advance since August 2016. On May 18, 2017, gold gained $21 to move from $1237 to $1258. Although very respectable, the resulting $21 gain still falls five dollars short of yesterday’s net increase of $26 per ounce.

The most recent economic data released today clearly indicates that as the economy grows inflation is heating up. The consumer price index for January had its most significant increase in five months. Year on year, the consumer price index is up 2.1%.

Dollar weakness continues to accelerate, with the dollar index breaking below 90 today. As of 4:00 PM Eastern standard time, the U.S. dollar index is trading off by 51 points and is currently fixed at 89.58. This marks the second consecutive day of lower pricing.

Gold stages an impressive recovery today and, as of 3:30 PM Eastern standard time, is trading up $10.20 (April futures) at $1325.90. This upside spike is truly a combination of both a weaker U.S. dollar along with buyers bidding up the precious yellow metal.

I have been an active trader and was licensed as a commodity broker in 1984, which means that I was present for the equities meltdown and crash of 1987. I was also in the industry in 2008 when the U.S. stock market crashed following the banking crisis which resulted in a multiyear recession.

There are two critical numbers that gold investors and traders need to watch carefully for signs of support: fifty and fifty. The first critical number represents gold’s 50-day moving average. The second critical number represents a 50% retracement of the most recent rally. Interestingly enough, these two numbers intersect at roughly the same price point in gold.

Say what you will about the underlying causes moving gold lower or higher, but the bottom line and the real truth is that dollar weakness or dollar strength is an unremovable component of gold pricing, not an outside market

The roller coaster ride that is U.S. equities continues at full steam, with extreme price swings resulting in a 1100-point range in the Dow Jones Industrial Average. U.S. equities opened lower and the Dow Jones Industrial Average traded lower during the first part of the trading session.

Regardless of what financial markets you follow, today you witnessed one of the most volatile days ever on record. The Dow Jones Industrial Average traded 1600 points lower midday before recovering slightly, closing down over 1100 points on the day. Today’s price decline represents the most substantial intraday point drop for the Dow in history.

At its low today, the Dow Jones Industrial Average was trading off by over 650 points. As of this writing at 3:15 PM Eastern standard time, the Dow is off by a little over 550 points, which is a net decline of 2.11% on the day, closing on the lows at 25,520, down 665.