Gold

“So I'd like to know where, you got the notion, said I'd like to know where, you got the notion
to rock the boat, don't rock the boat baby, rock the boat, don't tip the boat over.”

Market participants will have their ears finely tuned today listening for any new information coming from comments made during the Federal Reserve’s annual symposium held in Jackson Hole, Wyoming. Tomorrow’s activity will be of vital importance as both Janet Yellen as well as Mario Draghi will speak directly to members present at the symposium.

Over the last few trading days, it has primarily been the strength or weakness of the U.S. dollar that has been the single greatest influence on the price of gold. Yesterday’s six-dollar decline was almost entirely (95%) due to dollar strength. Today’s five-dollar advance has also been almost entirely predicated on the dollar, in this case, dollar weakness.

After trading to above $1300 (an intraday high of $1306), resulting in gold prices reaching a three-month high, a strong U.S. dollar today has caused the precious yellow metal to trade lower on the day. It seems $1300 an ounce is a tough price point for gold to trade and close above.

Gold prices continue to rise this week, trading to an intraday high of $1299.70. As of 3:30 EDT, gold futures are trading up $5.40 at $1297. The net gains of gold in 2017 are now residing at around 11%. Many analysts believe a break above 1300 will be significant and signal a further rise in the precious yellow metal.

Since the presidential election and victory by Donald Trump, the U.S. equities markets have been on a rampage. This has resulted in setting forth one of the most dynamic rallies in American history. Soaring to new record values and all-time highs, this most recent equities rally has been predicated on the belief that this new administration would be transformational.

Investors and market participants continue to digest and parse key events from yesterday. Political turmoil, along with the release of last month’s FOMC minutes, has caused major repercussions across a wide swath of financial markets.

This morning the Federal Reserve released the minutes from last month’s FOMC meeting. The minutes contained statements by Fed members indicating a more dovish stance regarding the next interest rate hike as well as the initiation of their balance sheet liquidation timeline.

Recent events have resulted in a de-escalation of the current tension between the United States and North Korea. Also lowered is the probability of North Korea aggressively continuing its nuclear testing program.

Chinese pressure has, in fact, dampened the current tension as they issued a proclamation to implement sanctions created by the United Nations.

After last week’s dynamic upside surge of roughly $40 from the low of the week, today’s moderate selloff does not change our overall view and bullish demeanor in gold. Gold today traded to a low of 1284, and as of 4 o’clock EDT is trading at 1287, down seven dollars on the day, a loss of just over a half a percent.