While the interest rate backdrop swings favorable, other gold indicators are not yet
While real yields are negative (positive for gold) and credit spreads are weakening (positive for gold) the ratios of gold itself to cyclical markets have not yet signaled much, and so I guess that is why the miners – with inflationist gold bugs apparently still busy selling – have not done anything (other than suck).
First, here’s a view of the inflation rate, stretched far above long-term Treasury yields (indicating negative real rates).
Here are proxies for credit spreads showing Junk bonds cracking vs. 7-10 year Treasuries and…
…already cracked vs. 20+ year Treasuries.
And now the sad pictures of gold vs. US and global stocks, commodities and copper. Thing 1 is in play (the cracking of the inflationary macro as noted above and in previous posts). Thing 2 is for the inflationists to vacate gold and buy the thing they detest, US dollar (by force if necessary).
The macro is turning, but it takes time. Eh? That is especially important to the gold miners.
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