US inflation expectations are over %2 for the first time since 2018. Commodity prices are following the inflation expectations’ upward momentum so are the precious metals. Gold is up nearly %3 from the close of 2020. ETFs began to buy more gold and silver again.
Increasing FED’s assets, fiscal stimulus packages, hopes of speeding up the vaccinations and recovery of the economy, the possibility of a blue wave are some of the reasons behind this surge. A possible blue wave may add more fuel to expectations. But if inflation holds over %2 throughout 2021 FED may have to take the foot from the gas about asset purchases and the stock market may take a hit in the medium to long-term.