Is Gold Signaling Inflation?

The current market situation shows a quick attempt to push a smaller stimulus bill by the end of December before eviction protection and unemployment benefits end. If failed, it could potentially leave as many as 19 million people at risk of becoming evicted. This potential strain on the market could be the reason that safety plays such as Gold (GLD) and 20-year U.S bonds (TLT) have moved up recently as worries grow over cut benefits.

Above, you can see a chart of TLT, showing a potential double bottom pattern from its recent low at 154.77. Additionally, GLD has made a comeback from 166 and is now looking to make a phase change if it closes over the 50-day moving average at 176.50. 

With that said, NASDAQ did make a new all-time high, as did the Russell 2000 (IWM). Hope springs eternal.

In the meantime, the early dip in food commodities was bought up by investors, along with gold, silver and gold miners. Steel continues to rise, and a new shining trade-uranium woke up this past week. With the dollar weak, bonds yields falling again, more stim behind this stop gap measure if passes, and a potential rally in oil and energy, inflation is still very much on our minds for 2021.

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  • S&P 500 (SPY): Strong close with an inside day
  • Russell 2000 (IWM): Closed near last week’s highs with support 180.30
  • Dow (DIA): 300 is important to hold as new support
  • Nasdaq (QQQ): Record close. 300 support the 10-DMA
  • KRE (Regional Banks): 51.07 resistance. Support 47.22
  • SMH (Semiconductors): Strong close with 210 support the 10-DMA
  • IYT (Transportation): 225.49 resistance. 218.64 support.
  • IBB (Biotechnology): Needs to close over 148 resistance. 145 area support.
  • XRT (Retail): Support 59.24

Mish Schneider

Director of Trading Research and Education

Forrest Crist-Ruiz

Assistant Director of Trading Research and Education