Gold Sector Fundamentals Update

We have noted that gold vs. oil and gold vs. commodities have been improving, along with other items that are potentially positively impacting gold mining operations, slowly but surely even as the hype about the extinction of the sector became very loud.

Gold-Oil (GLD-USO)…

gld.uso

Gold-Industrial Metals (GLD-DBB)…

gld.dbb

Gold-Commodities (GLD-DBC)…

gld.dbc

The holdout macro fundamentals have been gold vs. stock markets and bond yield spreads, which have implied confidence in policy makers is intact.  This in turn, keeps gold’s safe haven selling point on the back burner.

Today gold is breaking upward in both the US and European stock markets.

GLD-SPY is still in technical lock down, but our job is to keep a tight focus on the proceedings.

gld.spy

GLD-HEDJ is making a strong move upward.  The trend has not changed, but it sure does bear watching.

gld.hedj

As for treasury bonds yield spreads, these are still not in line but we should not assume they are going to go in lockstep and give real time signals.  Rather than wave our pom poms, we should just quietly gauge the progress and keep a fine tune on things.

The bottom line is that sector fundamentals continue to improve and macro funda’s are at least bouncing.  Just a quick snapshot for you.  More to come…