The target for the 30yr Treasury yield is 4%. Yesterday it hit 3.85%. Close enough? I am not sure.
But one thing I am pretty sure of is that gold and gold stocks will appreciate it when yields stop rising.* That is why I am keeping a close eye on the situation. TYX is pretty darn close to target.
While gold stocks are only bouncing (GDX was included in this update about potential bouncers) from a technical perspective, the risk/reward as indicated by the yield’s proximity to 4% is very positive. Yields are pulling back today (bonds bouncing). I cannot tell you if this is the top for the yield or not, but given the proximity to target I am very interested in gold stocks from that RvR vantage point.
Going forward I’d want to see two things… 1) yields top out amid unsustainable Fed-fear hysteria and 2) the miners start to grind out a low. At this point it’s a bounce only, technically speaking. But this could change in a flash depending on the wider macro (one major aspect of which is represented by the chart above).
*Maybe not immediately, but in due time.
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There is another observation to be made here. We are in the last trading week of September. If the HUI closes below 186 on Friday, it will do something it has only done once since its inception in 1996: print six consecutive red monthly candles.
That would be more fuel for the eventual fire if it happens. When this thing turns it could be epic, depending on the wider macro.
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