Powell and Yellen begin their two- day congressional testimony

Washington (Mar 24)  Yesterday both Chairman of the Federal Reserve Jerome Powell and the secretary of the United States Treasury Department Janet Yellin began a two-day congressional testimony. In short, their testimony resulted in dollar strength which was the primary factor taking gold prices lower. As of 5 PM EST gold futures basis, the most active April 2021 contract is currently fixed at $1725.50, after factoring in today’s decline of $12.50 (-0.72%). Simple math determines that only 0.10% was attributable to market participants selling the precious yellow metal, with the remaining decline directly attributable to a strong dollar. The U.S. dollar closed higher as the dollar index gained 62 points, or 0.68%, and is currently fixed at 92.365.

Silver pricing was hit much harder today, with the most active May 2021 contract currently fixed at $25.095, which is a decline of 2.63%. This means that the vast majority of today’s decline in silver can be directly attributed to market participants actively selling the precious white metal.

This also can be clearly illustrated when we view the KGX (Kitco Gold Index). In the case of spot gold, the KGX is currently fixing the price at $1727.20, which is a net decline of $12.10 on the day. Of the $12.10 decline, dollar strength contributed $10.40, with the remaining decline of $1.70 attributable to selling pressure. Silver’s loss, however, was mainly due to selling pressure which resulted in today’s 2.60 % decline. The KGX is currently fixing spot silver at $25.01, which is a net decline of $0.73 per ounce. Selling pressure accounted for 2.24% or $0.58, with the remaining $0.15 decline directly attributable to dollar strength.

Reuters