Federal Reserve officials are anything but quiet before the 10-day blackout period that occurs just before an FOMC meeting. The first FOMC meeting of the year will begin on Tuesday, January 31, and conclude on Wednesday, February 1.

The financial markets echoed the uncertainty of market participants which caused a decline in US equities today, and strong gains in gold as a safe-haven play. This was certainly a day in which investors sought safe-haven assets while simultaneously avoiding the intrinsic risk of US equities.

 “Front-loading” is a process of distributing unevenly, with a greater proportion at the beginning of the process, and James Bullard thinks this should apply to rate hikes.

Gold futures traded to their highest value since April 2022 which led to selling pressure from traders taking profits. Gold traded to an intraday low today of $1906.20 before slightly recovering. As of 3:25 PM EST gold futures based on the most active February contract are currently fixed at $1912.70 after factoring in today’s decline of $9 or -0.47%.

Market participants continue to react to the bullish market sentiment created by yesterday’s CPI report. Inflation came in at 6.5% year-over-year last month, which is the sixth consecutive month that inflation has diminished since the peak of 9.1% in June.

Considering that as recently as June we had the highest level of inflation recorded in the last 40 years today’s CPI report from December was a welcome change as inflation continues to slowly dissipate. Just six months ago overall inflation peaked at an alarming 9.1%. The historical rise in inflation was a long process after coming in at 0.329% in April and 0.118% in May 2020.

It is a given that the potential for inflation to decline in the December report. The assumption that inflation continues to diminish and has for the most part been factored into market pricing., Tomorrow’s Consumer Price Index will occur after the strong and hawkish speech by Chairman Powell delivered yesterday at a central bank conference in Sweden.

Now that the jobs report has come and gone market participants are awaiting two exceedingly important events that will occur today and on Thursday. Today the chairman of the Federal Reserve, Jerome Powell delivered a speech at 9 AM EST at a central bank conference in Riksbank, Sweden. Then on Thursday, the BLS (US Bureau of Labor Statistics) will release the CPI report for December.

Gold futures and spot pricing closed moderately higher today. However, traders and investors bid the precious yellow metal lower with dollar weakness accounting for all of today’s gains. As of 4:40 PM EST gold futures basis, the most active February contract is currently up $5.80 or 0.32% and fixed at $1875.60.

Yesterday’s strong price decline in gold could easily be a “one and done” price dip based on today’s strong gains following the release of the jobs report for December. The report revealed that the labor market finished 2022 on a strong note with December adding 223,000 new jobs. This was well above estimates which anticipated an additional 200,000 jobs were added last month.