During the March FOMC meeting, the Federal Reserve raised its key Fed funds rates by 25 basis points, marking the first rate hike by the Federal Reserve since 2018. This was the beginning of the Federal Reserve pivoting from an extremely accommodative monetary policy to a policy of monetary tightening.

A lot has changed in how gold trades on the futures market. Gold futures used to open and close daily leaving a time when you could not place trades at the market, similar to the way stocks trade today.

Yes, gold has declined for the last five consecutive days. On Monday, August 15 gold opened at approximately $1816 per ounce and scored strong price declines over the last five consecutive days, characterized by four lower highs, and four lower lows taking the most active December contract of gold futures to $1760 with under a half hour of trading before closing for the weekend.

While there is still one trading day left in the week gold has lost considerable value since trading began on Monday. Considering December gold futures opened at $1819 this week and are currently fixed at $1772.20 per oz. gold has given up $47 in value. This amounts to a percentage decline of 2.58%.

One of the comments from yesterday’s “After Hours” article was a question about the identification and validity of a pattern. I felt that the reader was correct in identifying this pattern and warranted an explanation of how to incorporate this pattern into the current price action in gold.

Gold futures traded to a lower low than yesterday but held above its 50-day simple moving average. Today gold traded to a low of $1785.40, below yesterday's low of $1787.60. That’s $0.10 below the 50-day moving average which is currently fixed at $1785.50

A combination of traders actively selling gold futures and dollar strength caused gold to break below $1800 in trading today. Unlike last week when traders effectively bought the dip on the three days that gold traded to intraday lows between $1798 and $1800, this week's market participants contributed to the downward momentum.

On Monday, August 8 gold futures opened at $1790 and by the close of trading had broken and closed above its 50-day moving average and closed at $1805 per ounce. Throughout the remainder of the week, December gold futures closed above $1800 on a daily chart.

As of 3:55 Pm EDT gold futures basis, the most active December contract is currently fixed at $1800.90 per ounce after factoring in today’s decline of just over $12 or 0.66%. Unlike other days the dollar is not contributing to the net change of gold. Currently, the dollar index is in essence unchanged up 0.01% and fixed at 105.090.

The Bureau of Labor Statistics released the Consumer Price Index for July indicating that inflation came in below forecasts by economists polled by Reuters and the Wall Street Journal. Economists polled by various News services predicted a slight decline in inflation from 9.1% in June to 8.8% in July.