Another Moonshot… BDI (and its Relationship to Gold)

The Baltic Dry Index of global shipping costs has been on a tear. Where once it had been getting a lot of cross-talk due to the trade war, my view is that now it should have settled and BDI would be presenting a more accurate view of global shipping costs and by extension demand for goods, including or even especially commodities.

Here is the NFTRH chart we use to gauge the BDI vs. global stocks and commodities.

baltic dry index

Note though that Sentimentrader has a study out this week showing nearly universal negative results for gold after BDI makes a new multi-year high. But I created a chart that keeps my pulse regulated about it. The signal may be a short-term ‘sell’, but I am not a day trader and so I care more about how alike the shipping index and the lump of metallic value have been, especially over the last many years of global deflationary and US Goldilocks pressure.

bdi and gold

Just a little chart noodling for a Thursday morning. By the looks of it new multi-year highs in BDI are not bullish for BDI either! So what is it really telling us?

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