Bonds, Gold and Inflation

US yields are not aligned for the inflationary view as the yield curve sags once again today (2 year yields up, long-term yields down).

bonds

Japanese bond yields have popped on, I guess, some sort of revulsion against the BoJ’s ongoing policy of market manipulation.  That is easing a bit today as the still-negative yield settles.

Here’s the rest of the cavalcade of global bond yields, apparently not buying the great bond revulsion just yet.  If stock markets continue upward, whoever is huddling in government bonds will eventually get the memo that there is a party going on out there with a punch bowl and everything.

ust10

As for the US, here’s the view of 2’s and 10’s.  The proximity of 2 year yields at trend means risk for gold and the inflation view.  You write something like “risk for gold” and the risk is in being pilloried in the gold “community”.  Gold is in a bull market.  Get over it.  It is also in a rising risk situation right now (as rallies often are, almost by definition).  Gold’s entire baby bull market thus far has been attended by a declining 2 year yield, which has not yet broken its post-2012 trend line.

ust2

A look at the still downtrodden yield curve, also not yet friendly to an inflation story, or gold for that matter.  Interest rate dynamics are only one consideration for the gold market, but they are one of the key considerations.

ycurve

As for gold, it’s daily chart is still looking for 1400 or so, which has been the next target.  A continued hold of the 1300-1320 area is key to that scenario.

gold

[edit]  Oh yes, and then there is Payrolls, which is likely to alter the items in this post in some way, shape or form. 

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