NFTRH Update; Gold Sector & Macro Fundamentals Taking a Step Backwards

Folks, you know I am not a sponsor of any of this stuff.  I am a robot that needs to tell you what I see and how I interpret it.

What I see as of today is degradation in what had been an improving though incomplete fundamental picture for the precious metals and the gold stock sector.

First up we had the CoT data, which were very bearish as of last week.

Next, we have gold dropping hard vs. crude oil (which is rising right along with XLE as noted in the previous update).

gld vs. uso

Gold is dropping vs. commodities.


30yr-5yr yield spread is weak.

30 year to 5 year yields

10yr vs. 2yr done two ways, 10/2 (our more conservative method) and 10-2 (less conservative per and others) are bearish and neutral at best as noted previously.

10 year to 2 year yields

Gold vs. US stocks and Euro-hedged Europe is fully eliminating its former ‘constructive’ status.

gld vs. spy and hedj

Considering our concerns about the CoT, this is not a pleasant picture for the sector in the near-term because while stuck in a technical bear market as noted all along, a slowly improving fundamental picture is all it had going for it.  This week is putting a dent in that view.  The funda could still be on a big picture trend of improvement, but the daily views above are not bullish in the least.

A side note to all of this is that gold is risk ‘OFF’ and as more and more risk ‘ON’ items sport those bounce/bottom patterns maybe it all makes sense.  The upshot could be exactly what we have been noting for some time now, that an active bearish market stance may not work well for the balance of 2015 as risk seems to be coming ‘ON’ in many of the beat down markets and stocks.

We will of course update if/as the situation develops.