A very impressive rally in gold this week brings the market back towards the pivotal $1,900 level. The bulls will need to see a close today above $1,895 and then a close above $1,900. It shouldn’t take much to get back to November highs around $1,50 to $1,960 range.

You can say the rally is about an additional stimulus agreement, Dollar weakness or possible government shutdown. Taken together, these things all add up to the same thing. More money. Print more money. Spend more money. This is all they know how to do. After the FOMC Meeting conclusion this week, Chairman Powell reminded us that we face significant challenges due to the virus. The Fed is fully committed and will use every tool in their box to hit their targeted rate of inflation. They already let us know also, that there will be NO rate hikes thru 2021. Most would agree that there’s no sign or at least no concerns about inflation. So, let me ask you this. Have you seen what’s going on in the energies, crude and gasoline? How bout soybeans? How bout copper?

I’m telling you now, that this is the early stages of the next big bull market in commodities. The signs are there. Look at the Money Supply at record highs. Look at what the Fed is willing to do. We now have several vaccines being distributed and the economy will have a huge rebound as businesses around the globe begin to re-open. Demand will return because there’s tons of cash out there! Gold will break out above $2,000 again, and that will become the new bottom in gold.

Gold Feb ’21 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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