Has Gold Lost its Shine?

US Treasury nominee Jeannette Yellen called on Congress to act big to help the worlds biggest economy overcome the effects of the pandemic slump. Her comments, although expected by most participants, are still having a positive effect on markets on Wednesday morning.

Plenty of government spending in the US and other developed countries caused stock markets and Gold to rally earlier in 2020. It is worth expecting that a continuation of this course will allow markets to remain in line with previous trends.

Gold clearly lost its upside momentum towards the end of the year, temporarily falling below its 200day average at the end of November and hovering around this line for the last two weeks. This level has habitually acted as support for the uptrend during the last more than two years.

The gold ETF report released the other day showed record inflows in 2020, beating the previous record of 2009. However, it is worth considering that some investors are realising their interest in insuring capital against inflation in cryptocurrencies, while others are content to buy growth stocks in the expectation of strong positions in these companies in the years ahead.

Meanwhile, Gold has been stuck in a downward sideways slide since August. The recovery of the markets optimism this week brought the price back above 1850oz, and the 200day MA appears as support again. However, it is not able to split away from it.

The shortterm trend indicator in the form of the 50day average is…

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