Corona Vaccine An Inflation Catalyst

Conspiracy buffs are probably wondering if Monday’s big vaccine announcement (that occurred just after the election of Joe Biden) was a coincidence.

Would the outcome of the election have been different if the vaccine announcement was made a few days before the election?

Probably, but gold bugs need to ignore this market noise and focus on using good tactics… to get richer!

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important daily gold chart

The $1850 support zone stopped yesterday’s $100/ounce price decline. It offers investors a great real risk versus potential reward opportunity to enter fresh positions.

Stoploss enthusiasts can place a stop order at about $1845, basis this December futures chart.

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Conservative investors with a longer time horizon should focus on this weekly gold chart.

Gold is in a kind of technical “no man’s land” between massive support at $1788 and massive resistance at $2089.

The bottom line is that $1850 is a good entry point for short-term traders and $1788 is best for conservative investors. Having said that, investors with no gold (or related items) can buy at any price, because precious metals are the ultimate asset class!

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interesting BITCOIN chart

Like gold, BITCOIN is a private currency.

Many analysts view gold and BITCOIN as competitors. I view them both as solid members of the global private currency family, with gold of course being the “senior statesman”.

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daily Dow chart

While the Coronavirus has turned America into a bit of a pestilence and debt-themed wasteland, many companies are doing well and the Dow 30,000 price marker is important.

A two-week close above 30,000 could usher in a fresh leg higher. The government handouts related to Corona have been retained as savings by many citizens, and those citizens are sitting on the stock market sidelines.

Good news related to the vaccine and corporate sales could bring those investors into the market.

If republican attempts to overturn the US election are successful (unlikely), more debt is as likely as it is with a Biden administration.

While a vaccine announcement has initially produced a “risk-on” frenzy, it’s likely that inflation begins a significant uptick as citizens, corporations, and governments throughout the Western world take on even more debt… and then engage in even more consumerism than they did before the Corona crisis.

China’s economy has taken on damage from Corona, but less than in most other nations. A good vaccine could produce powerful gold buying in December and January, to celebrate the Chinese New Year.

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interesting silver chart 

While gold broke its October low and reached its September low, silver has held above its equivalent lows.

That’s a positive action, and it’s likely related to institutional concern about inflation and the green energy boom that the Biden administration is likely to promote.

Silver demand will grow as solar panel demand grows. Inflation could put that demand on steroids.

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GDX chart

 The upside breakout from the bull wedge pattern was legitimate, but it was overwhelmed with the vaccine news.

A pullback was expected, and to prove the breakout is real, GDX now needs to close above the $41.81 high. If that happens, a powerful leg higher should begin!