Folks, gold is bouncing today and yet the chart below is a bearish divergence, as the 30-5 yield ratio (top panel) continued to drop like a stone. For effect, the nominal 30 and 5 are shown in the lower panels.
There are no absolutes in the financial markets. There are only probabilities. Yield spreads such as the 30-5 should be rising to produce a constructive backdrop for gold. The opposite is happening in the short term.
Maybe this time it is different, but it is my job to produce information like this for you and also apply an interpretation to it. The interpretation is that there is a bearish divergence happening as of now to gold’s pre-holiday bounce. Forewarned is forearmed.
