Gold spot and futures both declined by over 1% today as traders reacted to dollar strength and stronger yields on U.S. Treasuries. But that explanation lacks the complete backdrop to the multiple reasons why gold is trading under pressure today.

Jesse day and Columnist for Kitco Gary Wagner recorded this interview last week.

00:00 Introduction

00:30 Weakness in the US Dollar

06:18 Gold Forecast

Today the Bureau of Economic Analysis (BEA) released its most current inflationary data vis-à-vis the PCE (Personal Consumption Expenditure Price Index). The report revealed that in June inflationary pressures continues to diminish while consumer spending continues to expand.

Yesterday’s article was composed within hours after Powell had concluded his press conference. While his statements were fresh in the minds of reporters and analysts asking questions, thinking about 24 hours after the fact his statements have left me bitter but more importantly questioning his ability to correctly communicate upcoming potential changes in the Federal Reserve’s monetary policy.

Today the Federal Reserve concluded its July FOMC meeting leaving only three remaining meetings this year. As expected, the Federal Reserve raised rates by ¼% taking its terminal benchmark rate to between 5 ¼% and 5 ½%, no surprise there. This took the fed funds rate (which is used to set the prime rate) to its highest level since 2001 or in 22 years.

ox·y·mo·ron [ˌäksəˈmôrˌän]

NOUN: A figure of speech in which apparently contradictory terms appear in conjunction (e.g. faith unfaithful kept him falsely true):

"that fashionable rhetorical novelty, the humblebrag, is itself an oxymoron" 

Members of the Federal Reserve tend to keep their future actions close to their chest revealing little insight as to any upcoming revisions to their aggressive monetary policy that has been in play since March 2022.

Gold futures are definitely under pressure today, with the most active August 2023 contract down $8.70 or 0.44% and fixed at $1972.10. The root cause is dollar strength that overcame fractional buying and still was able to take gold prices moderately lower.

The CME’s FedWatch tool is predicting that there is a 99.8% probability that the Federal Reserve will implement a ¼% rate hike on July 26 when the next FOMC meeting concludes. It is also likely that this month’s rate hike will conclude the series of hikes by the Federal Reserve that began in March 2022.

Investors are hoping for the rate hike pause implemented by the Federal Reserve to continue into the July FOMC meeting. Last month after 10 consecutive rate hikes at each FOMC meeting the Federal Reserve left their benchmark interest rate between 5% and 5 ¼%.