S&P 500 futures are gaining ground in premarket trading as traders look ready to buy stocks after yesterday’s pullback which was triggered by higher-than-expected inflation data.
The reports indicated that prices were rising faster than expected, and the market have started to price in the possibility of several rate hikes in 2022.
However, stock traders do not look too worried, and stocks are set to open higher at the start of today’s trading session. The “buy any pullback” mentality remains strong, and many traders question whether there is any real alternative to stocks in a world where most bonds yield less than inflation.
Gold Keeps Moving Higher
Gold managed to settle above the resistance at $1845 and is moving towards the next resistance level at $1875 as traders rush to purchase the precious metal after U.S. inflation reports. Silver also stays strong and continues its attempts to settle above the resistance at $25.00.
Gold is traditionally viewed as a hedge against inflation, and traders bet that this role will push gold towards the $1900 level and beyond. The U.S. dollar is trading at yearly highs against a broad basket of currencies, but gold traders ignore dollar’s strength as they stay focused on recent U.S. inflation reports.
Gold mining stocks gained ground during yesterday’s trading session, and VanEck Gold Miners ETF is set to gain more than 2% at the start of today’s trading session.
WTI Oil Moves Lower As OPEC Cuts Its Demand Forecast
WTI oil is currently trying to settle below $80.50 as OPEC has decided to cut its demand forecast for 2021. OPEC believes that demand would total 96.44 million barrels per day (bpd) compared to the previous forecast of 96.60 million bpd. The organization believes that total demand will be lower due to weaker demand from China and India.
Worries about inflation have also put some pressure on the oil market, and it will be interesting to see whether WTI oil will get enough support near the psychologically important $80 level.