indicators

Gold vs. Bonds, an Ongoing (lack of) Confidence Indicator

Why not pop in here some materials that don’t usually make it into NFTRH reports?

Gold/Bond ratios can be viewed as an indicator of confidence in governments and with the riskier bonds like EM and especially Junk, cyclical economic activity. That confidence is on the wane as the gold price (i.e. the price of a counter-cyclical monetary metal unencumbered by debt, as it pays no income) has been rising in relation to Long-term US Treasury bonds since 2016 (the technical start of the precious metals bull market) and international and corporate bonds since 2018-2019.

The weekly chart shows the trends and those trends are up with the recent pullbacks indicated as consolidation. Gold got over done vs. the whole lot of them and that is being addressed now. But the underlying trend remains gold positive, and confidence negative.

Also, bonds don’t like inflation and even if the Fed manages to reflate the economy through dollar-compromising inflation, there would be inherent problems within that operation as the inflation eventually eats away at multitudes unprepared for the rising prices that would result.

gold/bond ratios

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