Chairman of the Federal Reserve Jerome Powell made statements today that relieved some of the pressure that was brought on yesterday by Fed officials that were perceived as bearish for gold.  Although his comments did aid in gold rising in price today he continued to be ambiguous about future Fed actions.

Gold prices declined today as multiple officials of the Federal Reserve have suggested the possibility of additional rate hikes. This as the geopolitical risk premium that had been prominently factored into gold’s price is beginning to diminish. Over the last few days, multiple officials of the Federal Reserve have commented on the Fed’s current monetary policy.

After leaving interest rates alone at last week's FOMC meeting, investors are focusing on upcoming comments by multiple Federal Reserve officials this week including Chairman Powell.

As of 5:10 PM EDT, the most active December futures contract is up $5.70 (0.29%) and is fixed just below $2000 at 1999.20. But in the case of today’s rise in gold, the devil is in the details. All of the gains in gold over the last two days are directly tied to a major drop in the dollar index.

As of 5:35 PM EDT, December gold the most active futures contract is moderately higher up six dollars or 0.30%, and fixed at $1993.50. Yesterday the November FOMC meeting concluded which strengthened the dollar dramatically, taking gold lower.

As anticipated, Federal Reserve members unanimously voted to maintain its benchmark Fed funds rate at its current level  between 5 ¼% and 5 ½% for the second consecutive FOMC meeting. This second rate hike pause occurred after the Fed implemented 11 consecutive rate hikes beginning in March 2022.

Gold futures basis the most active December contract gained the second largest percentage and dollar gain in a single month this year. The largest single monthly gain in gold futures this year occurred in March. In March of this year, the most active gold contract (this data is from a continuous futures contract) gained $131.90, or 6.9% with a volume of 5.539M.

Approximately three weeks after the militant group Hamas staged a surprise attack killing over 1,400 Israeli civilians, the Israeli military moved ground forces expanding their activity into Gaza. The increased tensions in the Middle East resulted in gold futures surging above $2000 per ounce.

According to a report in Reuters News, “The U.S. economy grew at its fastest pace in nearly two years in the third quarter as higher wages from a tight labor market helped to power consumer spending, again defying dire warnings of a recession that have lingered since 2022.

As of 4:00 PM EDT, gold futures basis the most active December contract is up $5.80 and fixed at $1992. Gold futures did trade to $1998.60, just $1.40 under the key psychological of $2000 per ounce. On Friday, October 20 gold futures traded to an intraday high of approximately $2008. However, the move was unsustainable with gold closing at $1994.40.