Traders and investors are waiting for the release tomorrow of the Consumer Price Index inflation report that will be released right before New York markets open. The CPI will probably be one of the most important economic reports to be released by the government this month.

The selling pressure continued as U.S. equities continued in their dramatic decline. On March 28, the S&P 500 hit an intra-week high of 4635. What followed was five consecutive weeks of dramatically lower values. If today’s selling pressure indicates the week ahead, we could certainly witness U.S. equities declining over the last six consecutive weeks.

This week the Federal Reserve addressed revisions to its current monetary policy in its attempt to reduce the current levels of inflation to an acceptable target. The statement released after the FOMC meeting, coupled with Chairman Powell’s press conference, resulted in extreme volatility in many financial sectors.

Amidst today’s chaos and a complete reversal in U.S. equities and extreme dollar strength, gold exhibited price resilience. As of 4:20 PM, EDT gold futures basis most active June contract is fixed at $1878.80, up $10.00 or +0.54%. However, today’s price gains are a little deceiving because gold futures closed in New York at $1871 and did not factor in gains that occurred after the close.

The Federal Reserve concluded the May FOMC meeting and, as expected, announced that it will raise its Fed funds rate by 50 basis points (1/2%). While much of their monetary policy’s forward guidance remained straightforward and transparent there were subtle changes in the statement released as well as Chairman Powell’s words he used during the press conference.

In March of 2020, members of the Federal Reserve held an emergency meeting in which they announced that they would reduce the benchmark interest rate (Fed funds rate) to between 0 and ¼%. They also began an aggressive round of quantitative easing by purchasing billions of dollars of Treasuries and mortgage-backed securities (MBS) to shelter the U.S. economy from a global pandemic.

June 2022 gold futures opened this morning (4/29/2022) at $1895.80, far above yesterday’s low of $1871. Trading to a high of $1921.30 and settled in New York up 1.1% at $1911.70. However, on Fridays, Globex trading remains open until 6 PM EDT before closing for the weekend.

Gold traded to its lowest value in the last nine trading days with market forces taking the June 2022 futures contract to $1870.90 this morning. After opening at $1886.80, gold futures drifted lower and then recovered strongly. As of 4:30 PM EDT, the most active June 2022 gold contract is fixed at $1896.20 which is a net gain of $7.50.

Approximately two-thirds of today’s price decline in gold futures can be directly attributed to dollar strength. The dollar index continues its strong price advance gaining 0.66% in trading today, while June 2022 gold futures declined by 0.95%.