The gold bulls are fighting their way back today as stocks get hammered once again. The Dow Jones Industrial Average is down over 500 points at mid-day and could make fresh lows as the afternoon gets rolling. Numerous issues are driving risk aversion today, with the ongoing war in Ukraine being front and center. The war is seemingly taking a dangerous turn for the worse as Western nations amp up their supply of arms to Ukraine and as Russian President Putin takes his anti-west rhetoric a notch higher. Hanging in the balance is the energy supply for Europe. Russia now appears ready to squeeze European nations’ natural gas and energy supplies in what could lead to a massive recession in the region.

Much of the market’s attention remains on China following its recent lockdowns of various major cities. Chinese officials today, however, have reiterated their intent to keep markets stable and vowed to introduce further stimulus measures meant to do so. China has been the center of much negative attention in recent weeks as the country closed some cities, including Beijing and Shanghai, and forced mandatory Covid testing on some residents. The lockdowns could put a dramatic damper on Chinese economic output. As the globe’s second-largest economy, the effects may be felt across the world and could even put the global economy into a contraction. Not to mention, the lockdowns will also put further strain in already-strained markets and supply chains, fueling even more inflation in the process.

Non-dollar currencies are catching a break today as Chinese officials looked to calm investors. That improved sentiment towards those currencies has the dollar declining, although whether the day’s declines are sustainable is another question entirely. The stronger dollar has likely been a major roadblock for higher gold, and should the currency continue to trend higher, the gold bulls may have a challenging time taking the metal above resistance. The bulls are seeing a degree of victory today, however, as the metal has firmly retaken the $1900 level. The $1950 area could be next if bullish momentum is sustained and that resistance level could provide the bulls with a good test.

The bears will initially look for a decline to produce a close below the $1900 level. The real test for the bears, however, may be at the $1850 region. A close below this level could set the stage for a fresh leg lower in price that may have many of the bulls throwing in the towel. This could lead to an avalanche of selling that could take significant time and effort to undo.

The bulls have thus far done a good job of buying any dips. There may not be any reason to believe that this will not remain the case in the months ahead, even if the Fed hikes rates aggressively. The gold bulls’ metal will likely be tested in May, however, as the Fed is likely to hike rates by 50 rather than 25-basis points.

The gold market is moderately lower today as the bearish slump continues for the metal. Down nearly $18 per ounce at lunchtime Wednesday, the gold market remains below the key $1900 support level. Rising government bond yields and a surging dollar are both taking a bite out of sentiment today. Eroding technicals are also making it easier to sell gold today as the metal has yet to climb back above previous support levels. The lack of a bullish bounce could indicate more selling may be on the way in the days ahead, possibly even seeing the market decline all the way towards the next key support area at $1850.

The Dollar Index hit a fresh two-year high today. The strengthening dollar may become an increasingly key factor for the gold market as it makes gold relatively more expensive for foreign buyers. The higher dollar, combined with an increasingly aggressive Federal Reserve, could keep the gold bulls in check. A reversal in the dollar, on the other hand, could set the gold market on fire and could encourage buyers to take prices sharply higher from current levels. As the dollar hit a two-year high today, the euro hit a 5-year low. Unlike the greenback, the shared European currency is not seeing a flight to safety bid. Europe still gets much of its energy, in fact, from Russia and that has made costs skyrocket in the region. Russia cut off Bulgaria and Poland from its natural gas supplies yesterday. Any similar move directed at Europe could put the region into emergency mode as it struggles to replace all of that lost energy.

Stocks are higher today and seeing a nice bounce following Tuesday’s major declines. Any appetite for risk is likely to remain very limited, however, as the war in Ukraine rages on. This week is the busiest for the quarter in terms of earnings reports, and thus far those reports have been mostly upbeat. Despite upbeat earnings reports, the stock market may remain sideways to lower as risk aversion due to the geopolitical situation continues to be a major influence.

The bears have now gained some momentum and have a slight advantage on the daily chart. The bulls need to produce a close above resistance at $1950 and then $2000. If unable to do so, the bears may look to take the market lower and produce a close below support at the $1850 area. The gold market could remain mostly sideways until these levels are breached above or below. Risk aversion and the possibility of an increasingly aggressive Fed may be key issues for investors to focus on, along with the stronger dollar and rising yields. These issues may keep the gold market vulnerable to headline news and fresh developments. Shorts may want to be careful because of this risk and longs may continue to absorb any significant declines in the market until proven otherwise.

The gold market is sharply lower at lunchtime Monday as fears over Covid take hold. Both gold and silver are lower today, hitting two-month lows in the process. The selling was not limited to precious metals, today, and the entire raw commodity sector was hit hard over demand worries as Covid again spreads through China. The world’s second-largest economy is enforcing lockdowns in numerous areas including Shanghai and requiring testing of its people. With lockdowns having now spread to Beijing, there are increasing concerns they will have a very negative impact on global demand. The issues in China are expected to drive already-high inflation even higher and to put further strain on already-strained supply chains globally.

Worries over the Covid situation in China led to Chinese stocks being hammered yesterday for their worst decline in two years. The Chinese currency, the yuan, declined to its lowest level against the dollar since late 2020. The carnage may not yet be over, either, as the virus could easily continue to spread in China, possibly forcing even more closures.

The situation in China is a major factor for markets currently along with the ongoing war in Ukraine. The war still shows no signs of de-escalating. Traders today, however, appear to be more focused on China and Covid than the war. The threat of major supply chain glitches and lowered overall demand is fueling a sell-off in gold and other metals today. Despite stocks being sharply lower today as well, metals are not seeing any significant safe haven buying on Monday.

The lock of buying today and the storing selling pressure have broken the gold market on some levels. Spot prices have broken two support levels on the downside, $1950 and then $1900. The breakdown of prices could attract further sellers in the days ahead and gold could potentially have a long week. The market, while below $1900, is not far below and the bulls could attempt to recover some ground quickly. A rapid rise back above $1900 could attract further buying as bargain hunters look to get long.

The sell-off today has erased the bulls’ advantage on the daily chart. The next several sessions may provide clues about the market’s intentions going forward. The bulls will look to retake the $1900 level and then the $1950 level. The bears will look to produce a close below support at the $1850 area. Until these areas are breached, either above or below, the market could spend some time moving sideways. Of course, given the current geopolitical and economic scenarios, the smart money may be more apt to buy and get long than to sell and get short.

The next FOMC meeting is just a few weeks away. That meeting could provide serious clues about the central bank’s intentions going forward. The Fed may hike rates by 50-basis points in May rather than 25 and could do so in the next couple of meetings to try to get inflation under control.

Gold is lower today as the stock markets move higher. The Dow Jones Industrial Average is up nearly 200 points in early action Thursday as investors shake off some risk aversion and appear hungry to buy. Whether today’s rally is sustainable is another question entirely, however, as ongoing worries over the war in Ukraine and inflation take a bite out of sentiment. Stock charts are improving this week and that improved technical posture may weigh on gold as investors shy away from perceived safe haven assets. The party may not last long, however, as the war could take a bloodier turn in the days ahead and as inflation continues to run rampant.

The World Bank and IMF continue to hold meetings in Washington D.C. today. The central bankers are expected to sound increasingly hawkish regarding their monetary policies as the world grapples with price pressures. The globe could, in fact, be at the early stages of a massive tightening period that could see rates rise substantially. On the other hand, the central banks may also recognize the dangers posed by rising rates and may elect to take it easy on policy. The Fed and other central banks will be forced to choose. They will have to make a decision of whether to fight inflation aggressively at the risk of upsetting stock markets or letting inflation run higher while keeping the investing public appeased. Either way, markets could have a tough time ahead and volatility may be heightened for an extended period of time.

Possibly giving gold a boost today, the crude oil market is firmer while the dollar is weaker. Higher crude oil prices may bolster the inflation narrative and lead to buying of assets such as gold that may preserve purchasing power. The dollar weakness is also a gold positive as it makes the metal relatively less expensive for foreign buyers. Recent dollar strength has likely been a major factor in gold’s lack of upside follow through. How much the currency may have left in the tank is the subject of debate, however, as massive deficits and other issues may keep the dollar from rising much further. At the end of the day, the gold market may not need much help from outside markets as it will likely move due to risk aversion and safe haven buying.

Of note today is gold’s decline below the $1950 level. If prices close today below this support level, the bears could have something to work with and could look to extend the decline towards the $1900 area. A close below $1900 would almost certainly attract more selling interest and might fuel a decline to $1850. The bulls still need to produce a close above resistance at the $2000 level to build momentum.

The gold market is sharply lower today as rising bond yields and a stronger dollar take their toll. Spot gold prices are down by over $25 per ounce at $1953 and change in mid-morning action. Thus far, the yellow metal has been able to hold key support in what may be an encouraging sign for the bulls. The dollar has hit 101 today, reaching its highest level in two years. The yield of the benchmark 10-Year Note is now within striking distance of 3%, the highest level seen since March of 2018.

Despite these two markets having a negative impact on the gold market, the effects have thus far been fairly limited. The gold market appears to have some underlying strength that has put it into a two steps forward, one step back type of price action. Today’s declines could be nothing more than some profit taking after the market tested and was rejected at the $2000 level.

Despite the bearish outside market action being seen today, the gold market still stands to benefit from ongoing uncertainty surrounding the war in Ukraine. The war appears set to take an even bloodier turn, and as tensions mount further, inflows into the gold market could see a substantial increase. Investors have been busy buying into gold ETFs in a sign that the investing public still sees plenty of value in the yellow metal. Gold stands to rise further in the months ahead as inflation and the war fuel risk aversion and buyers seeking out perceived safety assets. The yellow metal could rise significantly even as rates rise, the Fed becomes increasingly aggressive and the dollar also gains ground. Normally, these issues could provide a serious barrier to higher gold prices. In the current world, however, the metal stands to gain as the bullish issues outweigh the bearish issues.

The gold bulls are still in control on the daily chart despite today’s decline. The bulls are still looking for a close above resistance at the $2000 level. A move above this area could see the market rocket sharply higher in rapid fashion, putting new all-time highs within reach in a short period of time. The bears are still looking for a decline. They first want a close below the $1950 level, followed by a drop to the $1900 area. The bears will certainly need some key lower closes in order to attract more selling interest and to shake out some of the weak longs.

For the time being and likely the foreseeable future, the gold market is and will remain a buy the dips market. The bulls have the path of least resistance to take prices higher and any dips (such as the dip being seen today) are likely to be aggressively bought by the bulls. The market is likely to be tested, however, as the Fed may look to raise rates by 50-basis points at each of its next two meetings. The threat of higher rates has thus far not been a major influence on gold, although it remains unclear if such a move by the Fed could put a major dent into sentiment.