As we discussed on Friday, this looks like the market is anticipating a lower probability of a big, multi-trillion-dollar stimulus package.  

Remember, last week the Treasury Secretary went to the Fed and requested the return of nearly half a trillion-dollars of unused funds from the original Cares Act.  The gameplan is to repurpose that money as targeted COVID relief for small businesses and federal unemployment checks.  

This can get money into the hands of people sooner.  The Democrat-led House would surely reject the smaller package.  But it may not require approval from Congress.  Congress has exclusive control of the purse.  But once they've appropriated funds (which they have through the Cares Act), "the President and executive branch enjoy considerable discretions as to how those funds are spent" (paper on Presidential Spending Discretion and Congressional Controls, here).

So, a more modest fiscal response is less inflationary, which leads to the dialing back on some inflation hedges. 

Of course, gold is the favored inflation hedge — and it has been sliding.     

Let's take a look at the chart …