Gold prices bounced back last week after finding support at the 200-day moving average. The precious metal rose more than 4% from the low on November 30, closing the week at $1,840.00 per ounce (see the following chart). At the same time, the U.S. dollar resumed its precipitous decline, breaking down well below its 50-day and 200-day moving averages (see the following chart). One reason for these opposite reactions was the bipartisan $908 billion stimulus bill that was negotiated in Congress last week. The prospect of serious inflation coming next year as a result of the cumulative stimulus infusions, coupled with the Federal Reserve’s policy of zero interest rates, will continue to depress the U.S. dollar and provide support for gold, which has historically been a hedge against inflation. Rick Andrews is president of Avant Capital Management.