Is Gold Signaling Coming Inflation?

future inflation signals gold and treasury bond yields year 2020 2021

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 it fails to pass, 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 treasury bonds (TLT) have moved up recently as worries grow over cut benefits. But what about the inflation picture? Yes, I’ve been talking about inflation at a theme into 2021 for awhile now.

Above you can see a chart of TLT showing a potential double bottom pattern from its recent low at 154.77. 

Additionally, Gold (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 (and inflation) 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 stimulus behind this stop gap measure if it 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

Twitter: @marketminute

The author may have a position in the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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