Gold and Dollar Record Slight Decline as Traders Tread Cautiously

Cautiousness is the overall demeanor of market sentiment as traders and investors await Chairman Powell’s appearance before both the Senate and House beginning on Tuesday. This will be followed by the Labor Department’s jobs report for February on Friday.

Gold and US Dollar Today

As of 4 PM EST, gold futures basis most active April contract is down $2.50 or -0.13% and fixed at $1852. Concurrently, the US dollar is also trading fractionally lower down 0.18% or 18 points with the dollar index currently fixed at 104.30.

Fed Members Remain Hawkish

The more hawkish faction of the Federal Reserve continues its strong narrative that was evident last weekend. On Saturday the San Francisco Federal Reserve President Mary Daly discussed economic and policy issues with Michael Strain, director of Economic Policy Studies at the American Enterprise Institute.

The first question presented to Mary Daly was, “how do you think things are going with the economy right now?” To which she replied, “I really think of it as a yes and situation. And what I mean by that is, yes, the economy has good momentum. Yes, the economy looks like monetary policy is starting to have an effect. We see some slowing in interest-sensitive sectors, and we feel a slowdown coming in a way that would be predicted by us raising interest rates.”

Throughout the interview, she continued to underscore the narrative of the more hawkish faction of Federal Reserve officials by expressing that the policy of the Federal Reserve most likely will continue to tighten and maintain the more restrictive policy for a longer time.

Chairman Powell’s Testimony On Tap

Although hawkish members of the Federal Reserve are in the minority Chairman Powell is expected to maintain that more rate hikes are needed for a longer time than previously anticipated when he addresses the Senate Banking Committee tomorrow and testifies before the House Financial Services Committee on Wednesday.

Chairman Powell’s testimony will be followed by two extremely important economic reports beginning on Friday when the Labor Department releases the most current data in the January jobs report which will be followed by the inflation data vis-à-vis the CPI report on Tuesday, March 14.

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Wishing you as always good trading,

Gary S. Wagner