May 21 Financial Breakfast: Gold rallies for first week in five weeks as dollar rallies, U.S. stocks V-shaped reversal off bear market edge

By    23 May,2022

The dollar index advanced on Friday (May 20) and U.S. bond yields fell as investors bought safe-haven assets as U.S. stocks fell toward a bear market, though the dollar's gains today were not enough to erase the huge losses earlier this week, which took the greenback off five-year highs as markets worried that the dollar's months-long rally might be overdone. Spot gold rose more than $30 this week, its first weekly gain since mid-April, as rising concerns about economic growth and high inflation boosted demand for safe-haven assets. U.S. oil rose slightly, closing above the 110 mark in late trading, as the European Union plans to impose an oil embargo on Russia and some regions relaxed their new crown epidemic sealing controls, easing concerns that slowing economic growth will affect demand.


On the commodities close, COMEX June gold futures closed flat at $1,842.10/oz, up 1.8% cumulatively for the week, ending a previous four-week losing streak. June WTI rose $1.02 to settle at $113.23; July WTI, which is more actively traded and has more open positions, rose 39 cents to settle at $110.28; July Brent rose 51 cents, settling at $112.55 per barrel.

U.S. stocks closed: The S&P 500 was essentially flat at 3901.36 points; the Dow Jones Industrial Average was essentially flat at 31261.9 points; the Nasdaq Composite Index was down 0.3% at 11354.62 points; the Nasdaq 100 was down 0.3% at 11835.62 points; the Russell 2000 was down 0.2% at 1773.266 points.

Global major markets at a glance

U.S. stocks closed largely flat, with a late rally pushing the S&P 500 off the edge of a bear market, but the index still fell for a seventh straight week, its longest losing streak since 2001; at one point it fell more than 20% from its January closing high, in line with the usual definition of a bear market.

Another week of turbulent trading ended with monthly expirations of options related to stocks and ETFs adding to price volatility. Safe-haven buying pushes U.S. Treasuries higher with the dollar

The week was characterized by buying low and selling high, as investors worried about a slowing economy and further tightening of monetary policy, while retailers hinted that high inflation is having a growing impact on profit margins and consumer spending.


The S&P 500's seven-week losing streak was the longest since the dot-com bubble burst more than two decades ago. According to Bespoke Investment Group, this is only the fourth time since World War II that a streak of seven weeks and longer has occurred. It's a small sample size, but no such moves have occurred during a particularly positive period for equity markets, the firm's strategists said in a report, rooted in the FOMC's hawkish stance and heightened concerns about the possibility of a recession.