In yesterday’s article, the primary focus was on the impact that the upcoming CPI report would have on multiple financial sectors including gold and the dollar. We spoke about a single Japanese candlestick, a “doji” which occurred yesterday in the daily Japanese candlestick chart of gold futures, and on Friday in the dollar index.

Gold traders and investors are acutely aware of the dynamic impact that tomorrow’s CPI report will have on multiple financial sectors, including gold prices. Gold futures basis, the most active April contract traded to a higher low, and a lower high than Friday.

Chairman Powell along with other Fed officials has been conveying a unified narrative, that inflation is “not far” from where it needs to be for the central bank to pivot from a restrictive policy to its first rate cut. Today’s jobs report reinforces and strengthens the likelihood of the first rate cut by the Federal Reserve by June of this year. 

Gold prices continue to advance trading to a new record close today with one notable exception: gains over the last two days have been primarily driven by dollar weakness rather than buying.

Today the chairman Powell continued the narrative that he and other Federal Reserve officials have been reinforcing, that the Federal Reserve is “in no hurry to cut rates”. 

Gold continues its dynamic rally moving to higher ground for the fourth consecutive day, with the last three consecutive days resulting in a new record settlement price. As of 4:00 PM ET, gold futures basis the most active April contract is currently trading up $11.70 and fixed at $2138.20.

Gold futures have advanced nearly $70 in the last two trading days. Beginning last Friday, gold opened at $2052.80, traded to a high of $2097.10 and settled at $2095.70 after factoring in a gain of $41. Today the strong advance and powerful upside rally continued.

Exceptional, phenomenal, amazing, surprising, astounding, and almost beyond belief are only a few of the many words that can be used to describe today’s exceedingly strong upside breakout in gold futures. Gold opened today at $2052.82 and by the close of Globex at 5:00 PM ET gold futures are up $$41.

There were three primary takeaways from today’s PCE price index report.

Tomorrow, the government will release the Fed’s preferred metric for gauging inflation, the core Personal Consumption Expenditure price index. The most recent forecasts are anticipating that core inflation on a month-over-month basis will double from 0.2% to 0.4%. Compared to one year ago (Jan. 2023) the core PCE came at 0.5%. For the second half of 2023, core inflation was only 0.1%.