More fact: Gold has followed the 30-2 down into correction mode ever since Op/Twist was first cooked up in September, 2011. That is because this particular alignment of yield spreads implies permissive policy on the longer end (and don't forget ZIRP as a bonus), and little inflation or systemic stress all at once. A nice little painting.
More fact still: If Op/Twist achieves its stated goals and if gold does what it has done since September, the relic would remain under pressure by indirectly manipulative policy. But what is important to the broad summer rally theme is silver's ability to out perform gold in the near term.
Gold can wait. It has waited centuries after all and most recently it has waited throughout the entirety of this decades old experiment in Keynesian fiat we've got going here.
There are a lot of moving parts to this market, and the second half of 2012 promises to be very interesting.
PS: Happy Canada Day to my friends north of the border.
http://www.biiwii.blogspot.com
http://www.biiwii.com
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I'm no gold bug, but let the charts, sentiment, and COT do the talking. Don't forget the USD crowded trade, CoT on Gold/Silver, seasonality, 10-month coiled MACD daily on Gold, etc to see the current high reward low risk for gold. I'm not saying that we will get an election year move in gold like we had beginning in July 1976 after a long consolidation like now, but even without that similarity anything can happen. It seems that over the last year (during the downtrend) that major gold sellers are creating new products and capabilities to suck in even more of the masses during this next run when it begins (e.g. APMEX now stores physical gold buys, NWT Mint has put a lot of great functionality and historical charts on its site, ...). The decline after this next run is going to make this one look puny as these gold sellers get more creative with their products. I will be unloading on this next go around.
ReplyDeleteRe 30s/2s, correlation is not causation. The bond market doesn't buy gold, China and India buy gold.
ReplyDeleteThe US Treasury market, whether we like it or not, whether we believe it is real or not, is causal to a whole world of asset market activity. At least as long as those believing the illusion out number those who do not.
ReplyDeleteThe bond market may not buy gold, but it sure as hell influences those who do IMO.
Pow! 10-month Daily Gold MACD coil has been unleashed to the upside! Here comes the payoff for everything metal ... silver, platinum, ...
ReplyDelete