Today the curve is dropping with nominal yields rising. Implication (taking one singular day as a stand-alone)? Anti-gold and pro-risk 'ON'... among other things. Hey, that's what it says today...…
The 10, 5 and 2 year spreads are aligned with the curve rising and nominal yields declining today. That is theoretically a pro-gold and risk '0FF' alignment. Somebody forgot to…
Yields spreads from 10 to 5 to 2 years are declining, while nominal yields rise. In other words, there is nothing risk OFF'ish about this in the least and liquidity…
The market may be a little jumpy today but whirring beneath the surface here on Fed hype day, the 10 vs. 2 year yield curve is looking risk 'ON' ish. …
The latest data from Bloomberg shows yields declining in gold’s favor today as the short end (2’s & 5’s) drop in yield faster than the long end. That is a bump up in the curve.
There is a lot of talk now about a flattening of the yield curve. This talk has been among the most intense right here at the website you are reading at this moment. A flattening curve is commonly viewed as bad for gold, and according to Mark Hulbert, is an indicator of a coming recession.
Why you should care about the yield curve
But is the curve really flattening or is this all hype based on Janet Yellen’s press conference comments? Here is a chart the likes of which we have been using in NFTRH for many months now, the 30 year vs. the 5 year yield.
MarketWatch shows a similar chart in its article…
The world expects the FOMC to update its expectations regarding a tapering of Treasury bond asset purchases tomorrow. The world thinks that a tapering of these purchases would be bad for gold.
I think a decrease in T bond purchases would be anything from neutral to a potential positive (see post coming later today on the matter). Regardless, it is time to be looking out beyond FOMC with regard to the precious metals, a most sensitive sector to monetary policy.
So here is a check list of what we want to see in order to press the bull stance.