NFTRH Update, Post-Employment & the Precious Metals

Folks, today’s bad employment number is but one sample and it will probably take a trend to confirm anything about a softening economy.  But with T bonds rising hard today and their yield spreads lurching in a gold positive direction, we continue the recent mini trend of improving fundamentals for the gold sector.  Remember, gold is counter cyclical.  On that note…

  • Gold is still rising vs. oil, which is gold miner friendly
  • Gold is rising vs. commodities, which is friendly to NFTRH’s biggest picture view of chronic economic contraction

On the negative side, junk bonds are rising again today indicating risk is still ‘ON’ for the stock market.  But is it really?  The lower 2 panels show junk bonds declining vs. T bonds and investment grade.  More likely, people are just flying into bonds of any kind today and not discriminating in their behavior.  The relative strength of safer T bonds and IG could be a bearish hint beneath the surface of the market.

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In NFTRH 273 I am going to focus on gold ratios as macro indicators.  The weekly views of gold-oil, gold-industrial metals and gold-commodities in general are starting to look good.  This is absolutely vital to our fundamental view.

Separately, please recall that the S&P 500 hit a short term upside target vs. gold recently as well.  It is time to start watching for positive developments in that ratio as well.

Bottom Line

Today helped our big picture thesis, which has been making some improving signs lately as gold has bounced vs. various commodities and markets over the last couple of weeks.

If this continues, the fun starts as we begin to confirm a new story on the macro.  See you Sunday w/ NFTRH 273.