Stocks And Gold – Hot And Hotter

Inflation Expectations

inflation expectations

Inflation expectations have moderated their run, and are currently consolidating. The key sign here is that Treasury yields are no longer frontrunning them, but have come modestly down lately. Coupled with the USD/JPY below 109.20 making a rounding top, that‘s one less headwind for gold.

Gold, Silver and Miners

gold, HUI and TLT

Miners aren‘t underperforming, and the tentative signs of strength beyond the intraday flavor returning, are there.

gold, silver and copper to 10-year Treasuries yield

Silver didn‘t outperform yesterday, which means that the precious metals sector isn‘t approaching short-term overheating. At the same time, the copper to 10-year Treasury yields is increasingly supportive of the coming gold upleg.

Summary

S&P 500 is short-term consolidating only, and getting ready for a new upswing whenever the technology behemoths turn. These are the decisive factor of sustainable and noticeable stock market gains.

Gold and miners have bullishly consolidated yesterday, and are amply supported by related markets to score strong gains next.

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Monica Kingsley 2 months ago Author's comment

A very prescient title...

European session update: we got some more SPX and XLK buying to top the daily reversal off. At the top of the recent consolidation range, new ATHs are once again in sight. As for metals, needless to say they extended gains... who would have throught but the bulls who did their homework...