After selling off and gaping lower on the open in Australia forty-eight hours ago and trading to a low of $1385, gold quickly recovered with today’s dramatic gain of $27. As of 4:19 PM EDT, gold futures basis the most active August contract is currently fixed at $1417.10 which is a net gain of $27.80 on the day. This amounts to a 2% gain in gold pricing in a single day.

Gold prices plunged immediately upon opening Monday morning in Australia. This in response to a perceived favorable outcome of the one-on-one talks between presidents Trump and Xi Jinping at the G 20 meetings held in Osaka Japan. The keyword was “truce”, with both sides agreeing not to invoke further escalation of the trade war between our two superpowers.

As traders and market participants await news from Saturday’s one-on-one meeting between President Donald Trump and Chinese President Xi Jinping, the precious metals markets are so quiet that you can hear a pin drop.

As the two presidents of the United States and China prepare for their one on one talks at the G-20 meeting later on Saturday in Osaka Japan, it seems both sides have begun to posture their negotiations with a war of words emerging from both camps.

After reaching a new high for 2019 yesterday gold prices have retreated as traders and investors take profits and await any news from the upcoming G-20 meeting. Gold futures basis the most active August contract traded to a high above $1440 yesterday before trading lower and closing fractionally lower on the day.

Gold futures once again have traded to a higher high, higher low and higher close than the previous day. As of 4:30 PM EDT the most active August futures contract is currently fixed at $1426.20, which is a net gain of $8.00 on the day.

Gold continues the dynamic rally which is been in play for just about a month, with today’s gains of $24.00 taking the precious yellow metal to $1424.10, a net increase of +1.71%. Although dollar weakness provided a tailwind to the rising precious metals prices, the effect of dollar weakness was marginal at best.

Trading to a high of $1415.40 in intraday trading today, gold futures basis the most active August contract not only traded to a new record high for this year, but closed above $1400 per ounce. As of 4:10 PM EDT August futures are currently fixed up $6.00 at $1402.90. That is a net increase of +0.42%.

If the majority of market analysts are correct, when they proclaimed that investors and traders have been factoring in a series of rate cuts by Federal Reserve, along with rate cuts by other global central banks, then why did gold rise by almost $45 today?

I cannot think of many organizations or people that can convey a 180° pivot by the use of a single word, except for the Federal Reserve and its chairman, Jerome Powell. When we looked at the CME’s FedWatch tool yesterday it predicted less than a 20% probability that the Federal Reserve would announce and implement a rate cut today. In fact, that is exactly what happened.