For you gold experts on fundamentals and economic logic, I would like some opinions on what is happening currently which to me seems like a dislocated market conditions.
US 10Y bond yields are dropping with that KEY 2.60% crucial to hold but didn't.
US 3mth bond yield is now beating the 10Y so the so called yield inversion
US stock markets are still keeping its recent trajectory
Gold rally is looking long in the tooth
Our property market is out of cycle currently but from a bank source lending perspective, that is better for them and mortgage market in not independently raising basis points from RBA official rates. This is the ST reprieve I can see.
With the current results from the QE1-3/Twist, it is quite clear that the market is getting this tail wind should the US economy go backwards. Its major trading partners China/EU are both either contracting or going into recession so I have no idea if US will follow or the beacon of growth driving other economies.
In fact I am warming to the idea that foreign economies contracting is actually good for the risky stock markets as stimulus/lower rates will keep propping up yield chasing narrative. So how does that favor Gold? I am still grappling with the understanding if a low yield environment favors gold or not?
The current price action from 2018 suggest it is inversely correlate. In the same way the DXY is also flipping from inverse to positive correlation to Gold as of the last 6 months.
Maybe I am looking at all the noises but I don't buy the debt implosion besides a logical FONGO relationship. The market wide intelligence already know that the Feds have been in a sell bonds program but does anyone see a bond price collapse?
Let's get started on a more meaty discussion instead of the usual rubbish I keep reading.. Thanks.
