Gold is still going strong, trading up near a three-month high, but only due to a sharp dip in the US dollar. At the time of writing, the precious metal was hovering just shy of $1,837/oz and may well make a second attempt to test $1,850 if it manages to break out of the $1,846 resistance level.
The greenback is retreating under pressure from market confidence in the duration of the US economic stimulus alongside mounting inflationary jitters. This is unsurprising as it would be foolish to expect that the $120 bln per month asset purchase program would be dialed back as soon as the first signs of economic stability materialize, and that Biden would walk away from the idea of pumping additional funds into the economic system. The market has simply got carried away with this narrative. And once a new one arises, everyone will run in the opposite direction.
Silver is also looking good, holding steady around $27.48/oz in Tuesday morning trading. Yesterday, the precious metal retraced to a February 25 high, flirting with $28.00, and could make another run on $28.26 before long.