Friday, April 03, 2009

Market Sentiment: Inflation's Return?

Is this too soon to call? After a brief run of deflation in the latter part of 2008, 2009 brought in a new round of inflation. Bond Prices look to have peaked and oil prices have at least bottomed. The question for oil is whether it hangs around the $40-50 range or starts to shape a new bull trend. If the former then the inflation count goes on hold but irrespective of this the deflation model is no longer true.

Certainly Fed and Government action point in favour of inflation. Gold Bugs will be pleased; but there appears to be excess speculation priced into the metal compared to Platinum and to a lesser degree, Silver.

Is Gold taking its lead from Oil of 2006/07?

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, stock charts, watchlist, multi-currency portfolio manager and strategy builder website. Forex data available too.