While gold posted strong gains on the day, on a week-by-week basis gold futures closed very close to its opening price on Monday. Much of this week’s price swings were directly tied to wild variations in dollar strength as well as dollar weakness. On Wednesday the dollar index traded to a low of 90.12, and closed at 90.67 gaining approximately ½ a percent.

Traditionally gold has reacted to inflation with a direct positive correlation. In other words, higher inflation would typically create bullish market sentiment for the precious yellow metal. Yesterday’s report by the Bureau of Labor Statistics indicated that inflation rose by 0.8% in April, which takes the annual inflation rate to 4.2%, which is the highest level of inflation seen since 2008.

Today the Bureau of Labor Statistics reported a tremendous and unexpected spike in inflation. That data sent shockwaves through the financial markets across the board. U.S. equities were hit hard, with the Dow Jones industrial average losing 68.50 points which is a net decline of -1.99%.

As of 5:15 PM EST, the most active June 2021 contract is currently fixed at $1838.40, which is a fractional gain of $0.80 on the day. However, the real news in trading today was the intraday low that came in at $1817.80 before recovering over $20 to close with modest gains on the day.

Since the end of March and the beginning of April 2021, traders have witnessed gold pricing begin a price advance after reaching a double bottom at $1675. The first of the double bottom’s occurred during the first week of March and then trading back to that price point on March 31st.

TRADING NATION

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PUBLISHED FRI, MAY 7 20211:39 PM EDTUPDATED FRI, MAY 7 20212:08 PM EDT

THE ECONOMY’S “GROWING PAINS” ARE ON FULL DISPLAY, ONE MARKET ANALYST TOLD CNBC ON FRIDAY AFTER APRIL’S JOBS REPORT FELL FAR SHORT OF EXPECTATIONS.

Gold futures had a historical upside move today. Not only did gold pricing break above the key and major resistance level that occurs at our harmonic. We define a harmonic when two different technical studies point to the same price point. In the case of gold today, it broke through a major key psychological level at $1800.

Yesterday’s remarks made by U.S Treasury Secretary Janet Yellen spoke about the current status of interest rates in regards to the Federal Reserves’ commitment to maintaining extremely accommodative Fed Funds rates set between 0 and ¼%. To paraphrase, she said that interest rates in the United States might need to rise to prevent the economy from overheating.

Yesterday both gold and silver moved to higher pricing. In the case of silver, the most active June 2021 contract gained in excess of 4% and moved back over $27 per ounce. Gold gained a respectable 1.34%, and after trading to a high just $2 below major resistance at $1800, closing at approximately $1792 per ounce.

Gold futures had a strong and respectable gain in trading today, with the most active June 2021 Comex contract gaining just over $25 per ounce. As of 4:45 PM EST, the most active gold contract is trading up $25.50 and is currently fixed at $1793.20. After trading under pressure and closing lower last week, gold futures opened at $1768.10, which corresponds roughly to the close on Friday.