A potential turn in PM sector may have signal from Yield spread turning from flattening to steepening.

Since 2012 SGR and yield spread bet TYX /FVX has been in a positive relation.

As the ratio goes higher spread is widening and narrows when it goes down.

Lately the ratio has turn up and made higher high and higher lows.

Today ratio moved and HUI also moved higher.

Per Steve Saville TSI Blog on this relationship:
From 2003 to 2007:
“as yield spread widened (short term interest rates fell relative to long term rates) gold trended higher relative to industrial metals and HUI provide substantial leverage to gains in the gold price. However, the ability of gold stocks (HUI) to leverage gains in the gold price evaporated when the yield spread began to contract (narrows) and gold began to under perform the industrial metals.”

” a major yield-curve reversal from flattening to steepening is driven by the unravelling of an artificial boom or rising inflation expectations, it is bullish for gold. By the same token, a major reversal in the yield curve from steepening to flattening is always bearish for gold.”