Our expectations indicate more decline for the index during its upcoming trading.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses in its last sessions, by -0.81%, to lose the index by -269.24 points. It settled at the end of trading at the level of 32,910.91, after rising by 0.80% during Tuesday’s trading.

US stocks fell on Wednesday, with Treasury yields rising above the psychologically important 3% level, while oil prices jumped, raising concerns about inflation and interest rate expectations. The 3% level investors focus on because it represents an increase in interest rates and a reflection of inflation and market volatility.

Markets are now eagerly awaiting inflation data when the CPI is released at the end of the week, and economists expect prices to have risen 8.2% annually in May, compared to an 8.3% increase in April. Markets want to see inflation fall much faster.

The Federal Reserve is expected to raise interest rates by half a percentage point in June and July when it meets next week. But with inflation stabilizing at its highest levels in four decades, the Fed could remain aggressive about raising interest rates in the fall.

Meanwhile, the Organization for Economic Co-operation and Development lowered its forecast for global economic growth for this year to 3% from 4.5%, and forecast growth to slow to 2.8% in 2023, citing a “new set of adverse shocks” due to Russia’s invasion of Ukraine. Closures in China related to combating the outbreak of the emerging corona virus.

Technically, the index’s decline came as a result of the stability of the important resistance level 33,271.90. This is resistance that we had referred to in our previous reports, in light of the dominance of the corrective bearish trend in the short term. It is trading within the range of a bearish price channel, as shown in the attached chart for a (daily) period. We note that divergence is negative with the relative strength indicators, after reaching the areas of severe overbought. This is in an exaggerated manner compared to the movement of the index, with the start of the influx of negative signals from them. There is continuing negative pressure of its trading below the simple moving average for the previous 50 days.

Therefore, our expectations indicate more decline for the index during its upcoming trading, as long as the resistance 33,271.90 remains intact, to target the main support level 32,000.

Our expectations indicate a further decline for the index during its upcoming trading.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to break a series of gains that continued for six consecutive sessions. It recorded losses in its last sessions by -0.67%, to lose the index towards -222.84 points to settle at the end of trading at the level of 32,990.13. This is after rising with trading on Monday, by 1.76%, the index closed the month of May with a slight monthly gain of 0.04%.

President Joe Biden met with Federal Reserve Chairman Jerome Powell Tuesday afternoon to discuss the economy and inflation. In an opinion piece in the Wall Street Journal, Biden said he would not seek to influence the Fed’s decisions.

On the economic data front, the Conference Board’s index of consumer confidence fell slightly in May to 106.4 from 108.6 in April, reflecting concerns about rising inflation and a slowing economy. Economists polled by the Wall Street Journal had expected the index to reach 103.9.

US home prices rose again in March even as mortgage rates rose, leaving prices at all-time highs. The Standard & Poor’s CoreLogic Case-Shiller Price Index for 20 cities is up 21.2% year over year, while the Federal Government Price Index is up 19% in the same period.

Technically, the index’s decline comes as a result of the stability of the resistance level 33,271.90, that resistance that we referred to in our previous reports. This is in light of the dominance of the corrective bearish trend in the short term. It’s trading within the range of a bearish price channel, as shown in the attached chart for a (daily) period.  The continued negative pressure of its trading is below the simple moving average for the previous 50-day period, as we notice during the beginning of a negative crossover with the relative strength indicators. This is after it reached areas of severe overbought, in an exaggerated way compared to the movement of the index which suggests the start of a negative divergence in it.

Therefore, our expectations indicate a further decline for the index during its upcoming trading, as long as the resistance level 33,271.90 remains intact, to target the main support level 32,000.

Now fears over the logistics of actually distributing the vaccine are taking over the market, which may dwindle the enthusiasm for risky assets.

The last couple of weeks have not been the best for precious metals enthusiasts, as volatility dominated the markets.

So far, gold futures have given up last week’s gains, going down by 4.50 percent. Last week, gold attempted to recover, adding 3.82 percent, mainly aided by the fall of the US dollar which fell by 1.92 percent against a bundle of its main competitors. So far this week, the dollar has been recovering from last week’s losses, as the US Dollar Index climbed by 0.78 percent. Silver futures have also lost ground this week, going down by 5.03 percent and giving up some of last week’s 8.53 percent gains.

The sudden weakness of precious metals could be explained by the optimism that took over the market after Pfizer’s announcement of a coronavirus vaccine, bringing up risk appetite and boosting the performance of risky assets such as stocks. Right now, several countries are in negotiations with Pfizer  to secure doses of the vaccine, which according to the company’s early data is more than 90% effective.

Precious metals were surging since the pandemic began, as the rise of risk aversion across the markets has been pushing traders and investors towards safe-haven assets. Many also fear high inflation, as international central banks are considering imposing negative interest rates and having balance sheets that are hitting record highs.

Those fears are now being reinforced by governments’ decision to provide fiscal stimulus in order to keep the economy afloat, given the pernicious effects of the restrictions that were enacted to stop the spread of the coronavirus. Because of this, governments are currently piling on record amounts of debt, which could have negative effects in the long run, at least according to conventional wisdom.

In any case, the recent victory of the democratic candidate Joe Biden boosted the hopes for additional stimulus in the United States, which at this point is necessary and would have a positive effect in the short and mid terms. Moreover, the fact that the pandemic continues surging around the world signals that stimulus efforts are not ceasing anytime soon.

As COVID-19 continues to spread, it has already infected around 52,564,762 individuals and killed 1,291,785. The United States is the most affected country, with 10,708,728 total cases as well as 247,398 total deaths, followed by India, Brazil, and France. Many countries are considering an additional general lockdown, while others (like the United Kingdom and Israel) have already implemented it. Sweden, once praised for its unique approach, is now also considering additional restrictions given the recent rise in cases.

Now fears over the logistics of actually distributing the vaccine are taking over the market, which may dwindle the enthusiasm for risky assets. This is already affecting the stock market’s performance and could favor precious metals in the near future.