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Inflation Looms: Gold, Copper Spike, USD Falls, Big-caps Boom

#inflation #gold #silver #USD

$DIA $SPY $QQQ $RUTX $XAU $GLD $XAG $CU $USD $DXY

Thursday, Gold and Copper spiked as USD weakened on signs that interests rates will remain at all time lows, boosting inflation expectation ahead.

The Dollar Spot index extended declines for a 3rd day running Wednesday, supporting prices of commodities priced in Buck.

Stocks rose and bond yields tied to inflation expectations held gains from Tuesday, when Ms. Yellen said that lots of state spending is needed to fight The China Virus chaos, while down playing down concerns about the debt it creates aka, “Spend big now, Pay later“.

Precious metals were supported above by a weaker USD, the path of least resistance is now to the Northside in here with gold trading above last wk’s high and finding support above its 200-Day MA.

Copper had support on signs of greater risk appetite. Industrial metals have been helped by expectations of increased Chinese and US demand as the economies recover, ramping up spending on raw material that economic life will return to normal now that the COVID-19 vaccinations have begun.

Investors and traders are focused on Mr. Biden’s ability to pass his economic aid/relief/stimulus plans through Congress, which is likely to fuel a surge in metals demand in the US, the world’s 2nd-largest metals consumer after China.

With Democratic leaders pushing for a $1-9-T stimulus, there are “flashing signals that the kitchen sink is about to be thrown at an effort to drive the US economy, an effort that may have only short-term impact, but in the long term will cause further pain and ultimately will be negative for the USD and positive for gold,” economist Bruce WD Barren said Thursday.

Spot gold rose 1.4% to 1,866.33oz by 1:29 p ET. Silver, Platinum, and Palladium also closed higher. Copper prices closed 1.1% higher at 8,044.50/tonne on the LME, with all major base metals rising too. The Dollar Spot Index fell 0.2%.
Mega-caps powered the market to new record highs Wednesday. 

Wednesday, the benchmark US stock market indexes finished at: DJIA +257.86 at 31188.38, NAS Comp +260.07 at 13457.25, S&P 500 +52.94 at 3851.85

Volume: Trade on the NYSE came in at 992-M/shares exchanged.

HeffX-LTN’s overall technical analysis for the major US stock market indexes is Neutral to Bullish/Very Bullish in this overbought market.

  • Russell 2000 +9.4% YTD
  • NAS Comp +4.4% YTD
  • S&P 500 +2.6% YTD
  • DJIA +1.9% YTD

Looking Ahead: Investors will receive the weekly Initial and Continuing Claims report, Housing Starts and Building Permits for December, and the Philly Fed Index for January Thursday.

Have a healthy day, Keep the Faith!

#DIA, #SPY,#QQQ,#RUTX,#XAU, #GLD,#XAG, #CU, #USD,#DXY,#stocks, #bonds, #metals,#LME, risk,

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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