Gold

On January 3 gold opened at $1800 and began a dynamic rally that concluded on March 9 when gold hit its highest value this year of $2077. In just over three months gold gained roughly $277 in value or 13.33%. On March 15 the Federal Reserve enacted its first interest rate hike since 2018 and marked the beginning of a major correction that continues to this day.

While President Theodore Roosevelt’s statement “a date which will live in infamy” certainly does not apply to August 9, 2021, it is a date that professional gold traders will forever remember. Prior to the open of gold trading in New York it was evident in Asia that a major move in gold was beginning to take place.

Since last Friday the U.S. dollar has traded under pressure losing value on Friday, Monday, and Tuesday. During the same period gold has been trading under mild selling pressure holding on to a price point just above $1700 per ounce. Recently the dollar hit a high just above 109 on Thursday, July 14 before trading lower for three consecutive days.

Over the last three trading days, market participants have been active sellers of the dollar taking the dollar index substantially lower. On Thursday, July 14 the dollar hit its highest value during this rally taking the index to an intraday high of 109.12.

As of 5:44 PM EDT gold futures basis, the most active August 2022 contract is fixed at $1707 after factoring in today’s gain of $3.40 or 0.20%. At the same time, the dollar gave up 0.57% and is fixed at 107.30. This means that gold had a fractional decline before factoring in the increase because of dollar weakness.