Although gold prices had a modest decline in trading today, the overall fundamental environment that had caused gold pricing to trade above $2000 last week remains solidly entrenched. Today’s modest single-digit decline in gold resulted from market participants once again focusing on risk-on assets with U.S. equities rising.

Although some concerns regarding the banking crisis might be subsiding, there continues to be potential negative economic fallout. It is unclear whether or not the recent bank failures are limited to those banks identified or whether the failure of SVB and Signature Bank of New York are precursors to more banking failures.

For the second consecutive day gold futures have traded lower. Today gold traded to an intraday low of $1945 and a high of $1984 after opening at $1982.60. As of 4:15 PM EST gold futures basis the most active April contract is currently fixed at $1958.50 after factoring in today’s decline of $25.30 or -1.28%.

Gold as a haven asset has been the recipient of the financial uncertainty that has unfolded this month. Gold futures hit a low of $1814 on March 8 and traded to its highest yearly value on Monday when April futures traded to an intraday high of $2015. Although gold pricing wasn’t able to sustain attempts to close above $2000 it remains solidly within reach.

As expected, Chairman Powell held a press conference following the conclusion of this month’s FOMC meeting. However, one question, in particular, seemed to fluster the chairman of the Federal Reserve to a greater extent than other questions he is uncomfortable with.

The rally in gold spot and futures returns after a small two-day correction. On Monday of this week, gold hit a new high value at $2015 per ounce. It was approximately one year ago to the day that gold futures traded above $2000 per ounce. Gold traded to a high of $2077 in March 2022. What followed was a multi-month correction that began a conclusion in September through November of last year.

Yesterday gold futures surged to the highest value of 2023, however after trading to a high of $2014 gold basis is most active April 2023 contract closed well below the intraday high. The high achieved yesterday was not only unsustainable on Monday but led to a deep price decline today. Gold futures are currently trading off by 1.98% or $39.20 taking the most active contract to $1943.60.

Gold futures prices continue to dominate the attention of market participants with continued strong solid gains. There is a consensus amongst analysts that the precious yellow metal will continue to track higher, but there is also a consensus that there is an extreme amount of uncertainty as to the short-term direction or price changes over the next couple of weeks.

Gold futures surged to the highest value of 2023 taking out the former high of $1976 achieved in February. As of 4:09 PM EST, the most active April contract of gold futures is up $58.10 or 3.02% and fixed at $1981.10. Although dollar weakness contributed to today’s dramatic ascent it was only a small factor in a much larger picture.

On Tuesday of next week, the Federal Reserve will hold its second Open Market Committee meeting of the year. This will be followed by an FOMC statement and press conference by Chairman Jerome Powell on the following day March 22.