Powell and Yellen conclude their two-day congressional testimony | The Gold Forecast

Powell and Yellen conclude their two-day congressional testimony

March 24, 2021 - 7:35pm

 by Gary Wagner

Today both Chairman of the Federal Reserve Jerome Powell and the secretary of the United States Treasury Department Janet Yellin completed their two-day congressional testimony. In short, their testimony resulted in dollar strength as it did yesterday. Also, unlike yesterday, yields in 10-year U.S. Treasury notes declined slightly. The 10-year note is currently fixed at 1.617%, after being fixed at 1.629% yesterday.

However, the key difference between the two days of testimony was that gold was able to overcome market forces creating strong headwinds and close higher on the day, which did not occur on the first day of testimony by Powell and Yellin.

As of 5:42 PM EST, gold futures basis, the most active April 2021 contract, is currently fixed at $1733.40, after factoring in today’s gain of $8.30 (+0.48%). Gains in gold pricing did not erase the 0.74% decline that occurred in trading yesterday. However, what was remarkable is that these gains occurred in conjunction with a stronger dollar.

The dollar gained +0.30%, which is a total of 27 points and is currently fixed at 92.62. This was the second consecutive day in which the dollar closed higher. Yesterday the U.S. dollar closed higher as the dollar index gained 62 points or 0.68% in trading.

The easiest way to illustrate the strong demand, which is the outcome of bullish market sentiment in gold against the tide of dollar strength, is to look at the KGX (Kitco Gold Index). According to the KGX, spot gold is currently fixed at $1734.60. This is a net gain in trading today of $6.90. However, dollar strength actually took $5 per ounce away from its value, but strong bullish market sentiment moved the precious yellow metal higher to the tune of $11.90, which is how gold ended up closing higher by $6.90 on the day when there was moderate dollar strength.

Silver continued to spiral to lower pricing, although in percentage gains, there was not the strong selling pressure which resulted in a 2.63% decline yesterday. Today the most active May 2021 contract currently is fixed at $25.19, which is a decline of only 0.18%. Spot silver actually gained $0.05 in trading today and is currently fixed at $25.07. Just as in gold fractional or moderate buying took silver pricing $0.12 higher, with dollar strength taking away $0.07 of those gains resulting in a net gain in spot silver today of $0.05.

One of the primary topics that are at the forefront of the minds of market participants shaping their market sentiment is that although the United States is showing some economic growth, Europe continues to be plagued with continued issues from the pandemic. Germany, as well as Poland, are currently back in lockdown stages as they try to get a handle on the pandemic. America is not an island, and although we are showing some economic recovery, a global economic recovery will be absolutely necessary for the American economy to thrive. We live in a global trading economy in which all countries, to some degree, are dependent upon other countries to continue economic growth and expansion. America’s economy can only recover to a certain degree without the rest of the world being able to accomplish the same.

Wishing you, as always, good trading and good health,

Gary S. Wagner - Executive Producer

This report is now free and publicly available to everyone

Gold Forecast: Proper Action

We are currently long gold.

Futures: Gold (GC J21) in at 1722.80. Stop at 1690.

Forex: XAUUSD in at 1724.40. Stop at 1690

ETF's: GLD in at 161.55. Stop at 159.35


SLV in at $24.24. Stop hit at $23.50, for a loss of $1.05 per share
May 2021 (SI K21) in at $26.26. Stop hit at $25.3 for a loss of $0.96 ounce
Forex silver in at $26.17. Stop hit at $25,30 or a loss of $0.87 per ounce

On February 18 we entered a long April Platinum trade. In at $1282. Our stop was hit today (02/26/21) @ at $1217.00
SILVER FUTURES MARCH: Entry at $27.36, and then closed the trade later @ $27.45.
XAGUSD: Entry at $27.26,, our stop was hit at $27.39

We closed our positions in SLV:
First leg SLV: @ 22.95 .out at @ $24.99
Second leg SLV @ 24.60. out at @ $24.99

On Thursday February 4 stops were hit on our long GLD ETF. We entered at 172.14. Our stop was hit at $168.29 (the open on Thursday) for a $3.85 loss per share.

GOLD FUTURES APRIL: Entry at 1845 - 1859 . Stop hit at 1813 - average loss $3900 per contract
XAUSUD: Entry at 1845 - 1857 . Stop hit at 1813 - average loss of $38 per oz
SILVER FUTURES MARCH: Entry at 25.42 - 25.46 . Stop hit at 24.11 - average loss $6650 per contract
XAGUSD: Entry at 25.33 - 25.40 - Stop hit at 24.11 - average loss $1.3 per oz
long February gold @ $1890.00 and stop hit @ $1902.20, for a profit of $1202.00 per contract
long Forex gold @ $1886.00 and stop hit @ $1898 for a profit of $12.00 per OZ
long March silver @ $26.31 and stop hit @ $26.41 for a profit of $500.00 per contract
long GLD @ $177.26 and stop hit @ $178.00 for a profit of $0.71 per share
long SLV @ $24.67 and stop hit @ 25.00 for a profit of $0.33 per share
long February Gold Futures at $1860-$1866 and stop hit at at $1869. Average profit $600 per contract
long XAUUSD at $1856-$1862 and stop hit at $1866. Average profit $6
long March Silver Futures at $25.16 - $25.25 and stop hit at $25.30. Average profit $450 per contract
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long February Gold Futures at $1830 -$1843 and out at $1850 for a profit of $700 to $2000.00 per contract
long XAUUSD at $1841 and out at $1850 for a profit of $90.00 per mini 10 oz contract
long March Silver Futures at $24.29 and out @ $24.40 for a profit of $550.00 per comex contract
long GLD @ 1$71.50 and out @ $173.00 for a profit of $1.50 per share
long SLV @ $22.30 and out @ $22.50 for a profit of $0.20 per share
Long December gold at $1899. Stop hit at $1918, for a $1900 profit
Long forex gold at $1896.00. Stop hit at $1912, for a $1600 profit
Long December silver at $24.21. Stop hit at $25.07 for a $4300 profit
Long GLD at $180.46 and stop hit at $176.42 for a loss of $4.04 per share
Long SLV at $23.23 and stop at $22.78 for a loss of $0.40 per share
Long December Gold Futures at $1926 and stop hit at $1907.30 for a loss of $18.70 per ounce
Long Forex Gold at $1922 and stop hit at $1903 for a loss of $19.00 per ounce
Long December Silver Futures at $25.13 and stop hit at $24.73 for a loss of $0.40 per ounce
Long December gold at $1890, out at $1909.30 for a profit of $1,930.00
Long December silver at $23.95, out at $24.50 for a profit of $2,750.00
Long Forex gold at $1883.68, out $1907 for a profit of $23.32 per ounce
Long GLD ETF at $178.03, out at $179.80 for a profit of $1.77 per share
Long SLV ETF at $22.66, out at $22.03 for a loss of $0.63 per share

Gold Market Forecast

Although there has been a distinct and visible pivot in regards to the relationship of gold versus silver, it is only over the last few weeks that it we have seen that the two precious metals not always move in tandem, in the same direction. The first clue was in August of last year. Gold ran to an all-time record high of 2088, yet silver only reached an apex at approximately $30 per ounce. This is $20 shy of its all-time record high.

 However, as the rally began mid-March after the epidemic morphed into a pandemic we saw silver consistently outperform in terms of percentage gains, as well as percentage drawdowns. However even with that disparity they tended to move in tandem, both trading higher on a given day or both trading lower on a given day.

It seems as though over the last two weeks that clear relationship has become cloudy as we see days in which one metal will close higher and the other metal will close lower, not a typical reaction to whatever events are occurring on that day. That also means that the gold silver ratio which had hit a record low recently should begin to enlarge as it will take more ounces of silver to buy a single ounce of gold.

Market Overview

Economic Calendar