Still no big rally for Equities

It has been a lacklustre start to the week for stocks, as equities make modest gains while continuing to search in vain for a real catalyst to drive further advances.

• Market shrugs its shoulders at more vaccine news
• Shortened week offers hope of an eventual rebound
• Gold finally slumps below support

Early gains in the US have subsided somewhat while the FTSE 100 has struggled to make much headway, repeating the pattern of the past few weeks. It is notable the index has failed to replicate the huge gains seen earlier in November, suggesting that vaccine news is losing its power to inspire, while the continued bleak situation across Europe and the US keeps investors worrying about how long and difficult the winter will be. There is some hope that a shortened week in the US ahead of Thanksgiving and positive seasonality will drive us forward from here, but we are unlikely to see the cavalry arrive much before Wednesday afternoon, leaving equities vulnerable to a choppy couple of days. Happily of course December is another strong month so it looks like the positive story is not at an end just yet. 

The long-expected breakdown in gold has finally arrived, as the key support at $1850 finally gives way. Even those who are not fans of technical analysis could appreciate how key the $1850 area was in propping up the price, and even a trading novice could work out that the drop below this vital area, if and when it came, would be dramatic. So it has proved, and it looks like the floodgates have been opened, putting yet more pressure on gold as the retreat from the August peak goes on.