Gold Price Reaching A Critical Point

London (Mar 27)  Gold (NYSEARCA:GLD) is about to have quite the week. Last week, we saw an inflection point develop as the ACA healthcare bill failed to pass. As a result, we saw the major U.S. equity indexes experience outflows down from their impressive multi-month rally. We also saw the highest level in the VIX all year and investors ran the price up of gold further, just a few dollars shy of the $1,260/oz level, where the current 200 DMA is at. It'll be interesting to see how gold trades this week considering that investors got their first taste of delayed key agenda items from the Trump administration and that doesn't set a strong precedent for future items, like tax reform, to pass the floor.

Expect A Critical Week For Gold

I expect this upcoming week of trading for gold, and really U.S. assets at large, to see a critical week in light of last week's large developments. As a quick recap, Paul Ryan took back the ACA from the floor and a failure to repeal Obamacare quickly set in. It was at this time that we saw certain hospital stocks spike, like HCA Holdings (NYSE:HCA), Universal Health Services (NYSE:UHS), and Tenet Healthcare (NYSE:THC). This was quite the pivotal event as it means that future legislation, such as tax reform and a rollback of Dodd-Frank regulation, may take longer to achieve with more compromises coming from the Republican party. As such, we saw the VIX pop to its highest level in 2017. That's not a positive omen for a pro-inflationary agenda.

Source: SeekingAlpha