Loading ...TLT ( Bond Prices) and $HUI
pedro has highlighted the catalyst for Gold at this time
Thanks pedro…
The Co relation is Uncanny
This is the Price of the 20 year Bond shown with the Price of HUI ( Gold Stocks)
Lets wrap our heads around this
Bonds Down = Interest Rates Up
So as Rates are rising Gold Assets are Falling
As I understand it the key Driver of Gold Prices is the REAL Interest Rate
This can be represented as TLT vs The CPI / Gov’t Inflation rate.
I guess RINF is closest to the Inflation rate
So lets look at TLT:RINF
This doesn’t make sense to my feeble mind…but as I read this Real Rates are Droping
RINF is rising faster than TLT…this should be Bullish For Gold…but at the moment it’s NOT
Conundrum ? Or am I reading this wrong ?
TLT is the BOND PRICE. The Bond Price falls as INTEREST RATES RISE.
RINF is inflation EXPECTATIONS
The Bond price is falling (interest rates are rising) faster than inflation expectations.
i.e. Interest rates are rising faster than inflation expectations.
The bond market, it seems, is instilling a little bit of the Paul Volker medicine from 1980.
And TBT is essentially long bond yields.
I hear your ‘read’ SF. But inflation expectations are rising rapidly.
So Fully has a point.
Right now I’m blindly following NOMINAL rates via TBT.
No one has a great gauge on real rates, and certainly not EXPECTED REAL RATES.
And indeed, PMs anticipate expected real rates, and run bullish especially if real rates go negative. (Fed behind the curve raising, or ahead of the curve dropping).
So I’m keeping this simple until I see something clearer.
Although these relationships should work out over time the manipulation and suppression of the gold(and silver) price, distorts them in the short term.