After a convincing breakout rally above $1835 and then sustaining levels above $1850 here we are again, bouncing along at $1775. Just like that gold gave back $100 in premium. What’s wrong with gold? Gold can’t rally on clear signs of inflation. Gold can’t rally as a safe haven trade. But gold is basing another bottom and should have a very easy time moving back towards $1,900, but what will be the catalyst? I don’t think that it’ll be the risk off trade. It won’t be a weaker dollar trade either, because the dollar will be supported by rising rates. Rate hikes are coming. Inflation is undeniable and this administration is all about spending more…

I still firmly believe that gold will eventually rally on inflation. I know that the Fed will not have an easy time rising rates and that’s why inflation will continue to get hotter. Once gold gets back above $2,000, and it will, that will become a new bottom for a very long time. Some of you may remember when people didn’t want to buy gold at $775 because it was too “expensive”!

Gold Feb ’22 Daily Chart
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Frank J. Cholly

Senior Market Strategist

Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.

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