Gold

Gold prices fell sharply today after yesterday’s attempt to trade and close above both the long-term 200-day and interim term 100-day moving averages. This might have prompted short-term traders to pull profits after Monday’s price surge, which took gold prices back above $1800 per ounce.

As of 4:53 PM EST gold futures basis, the most active December 2021 Comex contract is trading off by $1.10 and currently fixed at $1805.20. Gold traded to an intraday high today of $1812.20, just below gold’s 200-day moving average, fixed at $1813.30. Gold’s current price of $1805.20 puts it below the 100-day moving average currently set at $1808.90.

A combination of factors resulted in gold spiking strongly higher today breaking above the key psychological level of $1800 per ounce. Dollar weakness was a strong component contributing roughly 1/3 of today’s strong gains. A disappointing U.S.

Market participants continue to be faced with uncertainties, uncertainty about the timeline for future Federal Reserve changes in their monetary policy, uncertainty about the length and damage the new Delta variant of Covid-19 has had on human lives and economic regrowth, and uncertainties surrounding the Taliban take over in Afghanistan.

Now for the third consecutive day gold prices have closed modestly lower as market participants digest the minutes released yesterday from the last so FOMC meeting and the inferences that can be drawn from an exceedingly strong jobs report last week. As of 4:30 PM, EST gold futures basis’s most active December 2021 contract is currently trading off by two dollars and is fixed at $1782.40.

Today the Federal Reserve released the minutes from the last FOMC meeting, giving market participants more insight into the future actions and timeline of upcoming changes to their current monetary policy.

Gold futures basis most active December 2021 Comex contract opened at $1789.10 and then traded within $2.90 of $1800, before closing lower on the day compared to both its opening price and yesterday’s close. As of 4:32 PM EST December, futures are currently trading off by $2.90 and fixed at $1786.90, a net decline of 0.16%.

The next important insights into the current thoughts and plans of the Federal Reserve will come on Wednesday, August 18, when the Federal Open Market Committee Meeting minutes will be released. However, it will be later this month at the Jackson Hole, Wyoming Economic Symposium, when we will gain the freshest insight into the current thinking of Federal Reserve members.

In yesterday’s opening letter, we talked about the potential for gold to stage a corrective upside rally based upon our current Elliott wave count using daily charts. Today we saw another 29 dollars taking gold prices substantially higher. As of 5:34 PM EST, Gold futures basis the most active December 2021.