Gold

Jeremy Szafron, Anchor at Kitco News interviews Gary Wagner, Editor of TheGoldForecast.com, where he discusses his technical analysis on Bitcoin's ascent past $50,000 and the S&P 500 surpassing 5000, analyzing the indicators that signaled these moves and where levels of resistance maintain.

Yesterday the Standard & Poor’s 500 index hit a new milestone trading above 5000 points for the first time in history. Equity traders witnessed another record today with the S&P 500 closing out the week above 5000. Optimism regarding a revision of the December inflation data revealed that inflationary pressures are even lower than the earlier data suggested. 

For the first time in three weeks, applications for unemployment benefits have declined. This implies that corporations are steadily maintaining their current employees. From this, one can infer that economic strength continues to persist.

For the first time since March 2022 the Federal Reserve spoke of an upcoming pivot from its former highly restrictive monetary policy based upon aggressive rate hikes, to an accommodating stance based upon rate cuts. Federal Reserve officials have been open and transparent in communicating that the time to reverse its course and lower its benchmark rates is approaching.

Gold futures basis, the most active April contract (GC J24) gained $9.10 or 0.45% as of 4:40 PM ET. Dollar weakness contributed approximately half of today’s gains, with the dollar index (USDX) declining by 0.24%, with the remaining 0.20% directly attributable to investors bidding the precious yellow metal higher.

Economically speaking, we live in a very unusual time in the way economists interpret upbeat economic data. Reports that reveal solid economic advancements in the past have been interpreted in a positive light as suggest economic growth and prosperity. 

The US Department of Labor released its weekly jobless claims report at 8:30 AM ET, revealing that jobless claims rose to a two-month high. Jobless claims rose by 9000 resulting in a total of 224,000 individuals that applied for unemployment benefits. Continuing claims increased by 70,000 to 1.898 million.

Today the Federal Reserve concluded its first open market committee meeting of the year. Three important takeaways were revealed in both the written Fed statement and comments made by Chairman Powell at the following press conference.

First, as anticipated the Federal Reserve decided to maintain its target range for the federal funds rate between 5 ¼% and 5 ½%.

While it is a widely accepted assumption that the Federal Reserve has completed its rate hike cycle, the Fed has been very close to the chest regarding when it will initiate its first rate cut. It is almost a certainty that it will not occur tomorrow. According to the CME’s FedWatch tool, the probability of the Fed cutting rates tomorrow has a 2.3% of occurring.

Today’s report by the Commerce Department came in just under the expectations of economists polled by Dow Jones. Economists were forecasting that the PCE for December would come in at 3% year-over-year. Today’s report revealed that inflation is cooling with a reading of 2.9% yearly a decline of 0.3% when compared to November’s yearly inflation level which was at 3.2%.