Gold futures basis the most active February 2022 contract had modest gains today and as of 5:25 PM EST is currently fixed at $1784.90. Gold traded to a high of $1789.30, and a low of $1772.40. The current price matches precisely with a technical level we have identified using a Fibonacci retracement.

Market participants focused on the most current events in the financial market that directly affect gold pricing which is higher treasury yields and a stronger U.S. dollar. The dollar gained 18 points today (+0.19%) taking the dollar index to 96.295. The United States 10-year treasury note gained 0.078 taking its current yield from 1.357% to 1.435%.

For the first time since November 17 gold futures had substantial gains, and most importantly closed very near the highs of the day. As of 4:00 PM EST gold futures basis, the most active February 2021 contract is currently fixed at $1784.40 which is a net increase of $21.70, or a gain of +1.23%. Gold traded to a low of $1766 and a high of $1788.

Yesterday’s commentary first began with the news that the CDC had confirmed that they have identified the first case of the Omicron variant in America.

The CDC today confirmed that California and San Francisco Department of Public Health has identified and confirmed that a recent case of the Covid 19 virus was the variant Omicron. This news is not alarming, it has always been a matter of when and not if cases of this new variant would begin to surface globally.

It was an extremely volatile day for market participants who trade gold. The first part of the trading session can be characterized by a surge in gold pricing. Concerns about the new Covid-19 variant "Omicron" took the precious yellow metal back above $1800, hitting a high of $1811.40 in the most active February 2022 Comex contract.

It was a combination of factors that led to gold futures closing fractionally lower on the day. After Friday’s 900-point decline in the Dow Jones Industrial Average, all three major indices staged strong comebacks in trading today. The S&P 500 gained 1.32%, or 60.65 points, and closed at 4655.27. The NASDAQ composite gained 1.88%, or 291 points, and closed at 15,782.8341.

Today the Bureau of Economic Analysis, a division of the US Department of Commerce reported that the cost-of-living has risen at the fastest pace in just under 31 years vis-à-vis the PCE (Personal Consumption Expenditures Price Index). The costs of goods and services increased by 0.6% in October. That takes the PCE index to 5% year over year.

Both gold and silver prices continue to decline as market sentiment is pricing in the real potential that interest rate normalization will begin as early as next year, and at a much quicker pace than anticipated.

Gold prices fell sharply following an announcement by President Biden to nominate Chairman Jerome Powell to continue to be at the helm of the Federal Reserve for the next four years. This had a cascading effect on multiple markets that resulted in gold prices losing over 2 ½% in value today.