Ratios to Gold; Updating What is Still a Counter-Cyclical View

So we have FOMC standing ready with the actual potential to rock the markets due to the split opinions of the Fed Rate Futures boyz. It has actually moderated back to a mild lean to rate cut (59% cut, 41% no cut) since this was tweeted, but it’s still a mile from the near-unanimous cut view of a few short weeks ago.

That is in contrast to most meetings when the media build it up as a “decision” when really, it is nothing of the sort. This time there is a question, and it is largely because of the lack of distressing economic signals. From Yardeni

citi economic surprise index

But the things of cyclicality and risk ‘on’ in ratio to gold are still favoring the counter-cyclical camp. Let’s get the updated view with FOMC standing ready to potentially alter or intensify these views.

SPY/GLD is trending down and has not broken bullish despite the vigorous bounce.

ACWX/GLD is similar.

DBC/GLD… yup, same.

Now let’s look at some nominal markets that are in line with the above pictures and would likely change only if the above changes.

10yr US Treasury yield…

Base Metals & Mining (and services)…

Base Metals…

Crude Oil, despite this week’s massive – and justified – hype has not yet changed trend.

There are more; many more markets and assets still trending down and waiting to see if gold’s real price, as measured in commodities and cyclicals, will change or renew its uptrend (downtrend in the 1st three charts above). Here again is the early bird to keep an eye on…

SLV/GLD made a more intense move than Oil did and it did not need massive global hype to do it. It was just time. The Silver/Gold ratio is in a normal consolidation to the big up move. But it remains in a longer-term downtrend.

Folks, these markets are going to get interesting. Bring on FOMC so we can get the answer to what is on this occasion a genuine question and get on with managing what’s ahead. It feels like a pivot is coming and that pivot will have either deflation or inflation at its core. Crowd boos Captain Obvious as he provides a question as a supposed answer…

Subscribe to NFTRH Premium (monthly at USD $35.00 or a discounted yearly at USD $365.00) for an in-depth weekly market report, interim market updates and NFTRH+ chart and trade setup ideas. You can also keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar and get even more by joining our free eLetter. Follow via Twitter @NFTRHgt or StockTwits.