Loading ...ST Gold Price Prediction Based Partly On Charts
Down a little, say to test point 4 again on the chart above, then, if the following story below turns out to be correct, up to point 5:
https://www.zerohedge.com/news/2018-03-17/russia-claims-us-training-syrian-militants-false-flag-chemical-attack-justify
Here’s how gold performed the last time the 10 year rallied strongly, which wasn’t that long ago:
For the avoidance of any doubt, this does not mean:
- The 10Y is *definitely* doing to rally.
- If the 10Y does rally, gold will *definitely* drop.
Longer term relationship, to the extent there is one, between gold & the 10Y. The two are sometimes roughly correlated and sometimes roughly inversely correlated:
I assumed you guys were aware of the (sometimes) relationship between the 10 Year and gold. I guess I was wrong about that. Moreover, no one *knows* the
future price of an asset IMHO. It’s only ever a “balance of probability” type deal.
A ‘sometimes’ relationship doesn’t really help us. All it does is tell us that the 10 yr alone is no good at predicting where the gold price is going to go, and thats’s even assuming you know where the 10 yr is going to go. I’m a bit confused here.
Not sure what else I can add I’m afraid. There’s never any certainty IMO with respect to how any asset class is going to move in future.
As of now, I think gold is inversely correlated with the 10Y, the 10Y is going to rally (it’s already broken the neckline of a possible IH&S & is working out a backtest of the neckline) and it’s breakout will accompany gold falling.
Under this scenario USD should rally & SM’s fall.
The markets will tell us soon enough.
For the 10yr to rally, that means one of the 3 remaining expected rate hikes for the year need to come off (we already went from 4 to 3 with inflation ‘lagging’, but still – higher rates are built into bond mkt expectations). Some ‘really bad’ econ news or flat/decline in inflation expectations (ironically ‘good’ news) may take another hike off the table – causing a 10yr rally, but I think that is unlikely based on trend. Think about the medium term trend – Fed’s been hiking for over 2 yrs now and recently accelerated (expected hike on the 20th) – they don’t change policy on a dime – look at the FRED fed funds rate chart since the mid 80’s – they don’t reverse course unless it’s to avert or quash an existing crisis.
Additionally as time goes on, there is smaller and smaller room to manage/save the economy through monetary rate policy.
My post on the topic
https://goldtadise.com/?p=425329#comments
Third chart down for 10yr rates – sure there’s short term room to the down side before NIRP but we’re approaching an apex event with the Fed Trend telling us it’s going to break – upward.
I agree GOLD is inversely related to the 10 year bond price precisely because if the 10yr breaks solidly below 119-120 it breaks a 45+ year trend. 10yr rates up = gold up as we clearn that 45yr ‘crisis’ ceiling line I drew in my post (second chart). That can’t be good for debt markets! BTW read this article about LIBOR spread (inexplicabely) going through the (short term) roof – can’t be good if the CB’s don’t get things under control.
https://www.zerohedge.com/news/2018-03-16/where-will-it-stop-libor-spread-blows-out-beyond-eurocrisis-highs-central-banks
We’re coming at things from a different direction really. I’m looking at the charts, all of them are indicating that all bond classes are going to break down, which
is significant IMHO. If this occurs, I’ll go long the miners once I think bonds & SM’s have bottomed. In fact, I’ll be working from the latter.
As to the whys, I’m not particularly bothered about that. I glance at ZH articles that interest me but other than that I work from the charts.
Heh, yea I know what you mean about ZH articles – how long has the sky been falling? One reason I don’t conceptually rely on TA being applied to Tbonds for anything over a 1 yr period is that price direction is determined by the fed funds rate, and much less based investor sentiment pattern behavior. A TA move might be read accurately and profited from within the confines of the long (multi-decade) channel of fed-managed prices but there are too many non-investor sentiment factors influencing price – at least for my taste. Same thing for 3x wasting ETN’s. As always time will tell. GL JL.
And to you, YYZ.
Fair enough.
If the Kremlin is unequivocally stating it, you can usually be sure that the exact opposite is in fact the case. Deliberate misdirection or “maskirovka” has been the modus operandum since Soviet times. ZH is a fairly obvious mouthpiece for them.
Feel the love: https://www.zerohedge.com/news/2018-03-17/putin-forever
It ain’t called Perfidious Albion for nothing.
Thanks for your charts JL
Place the completion of the two major political events of this decade on you 10 yr $TNX, Brexit vote & POTUS Trump election it give the chart another perspective. IMO both the $TNX and $Gold were reactions to political events and not reactions with each other with respect to 2016. IMO the markets are completely saturated, look at the cash hodings of the ETF’s, Mutual Funds, Commercial, Private Investors etc., they are all in. The only fresh money is either leveraged or the CB’s IMO.
I think we agree the PTB are going to force paper on the masses. IMO the paper will be made to look like the best option and the CB’s have made this clear with the “whatever it takes” mantra. Will this result in higher rates I’m not sure? Depends how paper looks when compared with the other options? If the markets are saturated the money needs to come from somewhere? Where is the money coming from to buy the paper? and when? and possibly who?
Trying not to get blind sided is getting more difficult all the time. How this plays out not a clue?
GLTA