Gold’s hidden affinity for Treasury bonds

Editorial comments follow the charts.

Amid the massive rush to risk ‘off’, just look at the similarities between long-term Treasury bonds…


…and the Gold/Commodities ratio.

gold/commodities ratio

…and the Gold/Oil ratio (Jesus, that is incredible… although the momo is not sustainable).

gold oil ratio

…and the Gold/Industrial Metals ratio (what a laggard!).

gold vs. industrial metals

…and the Gold/SPX ratio.

gold spx ratio

…and the Gold/Global Stocks ratio.

gold vs. global stocks

Not to mention another laggard (ha ha ha), the Gold/Silver ratio.

gold silver ratio

Here is the thing folks, gold bugs are fretting about the miners’ under performance to gold over the last couple of months. This after they were pumping as usual at the highs. But profits that were going to be taken should have been taken already. Stop belly aching! Be a man. Be a woman. Be a he him her they them for all I care. As Furio once said to the motel manager who enjoyed getting his ding-a-ling worked by the house prostitute in the Sopranos… “no bitcha to me, okay?”

This is the general time to be thinking about picking off the sissies, not being one of them. As if its ears were burning, here’s an excerpt from NFTRH 9, dated November 22, 2008 right smack in the middle of Armageddon ’08.

The quote in the 2nd paragraph is from NFTRH‘s very first subscriber, the late Jon Auerbach (then managing partner of Auerbach Grayson). If you are prepared, you just shut the fuck up and be a man (or a him her they them) and do what you have got to do, like the old pro who nailed it in 2008. Of course, no single day gives all the answers but each day brings new clues. Like those charts above, for example.

Even the owner of a well known gold website is talking about how gold is going to get croaked along with T bonds. But I would refine his view to say that gold’s ratio to cyclical, inflation-sensitive (silver, you awake?) and risk ‘on’ items will likely get croaked when T bonds get croaked. There are so many noisy views flying around out there right now and much of it is from the various orifices of the bugs, a loud bunch to begin with.

I don’t know if nominal gold will get croaked, but gold has been due for a pullback for some time now. Personally, I take the nervousness in the gold bug camp – whether it be the inflationists still puking their improper fundamentals or deflationists who don’t realize that this backdrop is the fueling station for gold mining operations – as a positive because a more Wrong Way bunch of Corrigans there has never been, speaking of the bug “community”.

The charts shown above are due to blow off and pull back. That includes gold’s ratios to everything except Treasury bonds. That would be a relief valve opening. But in the meantime, what is happening now is positive stuff to my favored macro situation at least. No bitcha to me. You should’a had cash and you should’a been prepared. It’s time to be wearing your big boy pants, your big girl pants or your big he him her they them pants.

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