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Yes, and bounced again this morning, interesting staying power this time round in the face of a rising dollar and US backed debt. Of course, it’s the long shadow of inflation that’s keeping it like that.
Time for a visit to the office I think - gold on a surge - someone give Shanta a prod and tell it to wake up whilst I'm away ;)
Very tidy performance from gold indeed - https://www.tradingview.com/x/ny9SFTNl/
Time for a bath....the joys of lockdown and "working" from home (call me a big girl - I don't mind :p).
Gold held 1810 and pushing back up at the moment (currently 1815). Doing better than expected :)
Yes, everything is caught in a bit of a downdraught at the moment and everything is going south with it.
Let’s see what tomorrow brings when the dust settles.
And if it manages to hold above 1820ish in the next day or two, despite everything, that's very bullish indeed (be pleasantly surprised if it does - as I'm sure it'll be attacked anyway). Gold still well within the overall uptrend since the start of April: https://www.tradingview.com/x/Axj6gDVb/
US10Y's in a little ascending wedge (bearish) at the moment - so fingers crossed this is an indication rises will peter out and escape downwards at some point in the near future https://www.tradingview.com/x/2Olv43YG/
Think it's time to switch off! Que sera sera.
Looking at the 10Y treasury yield charts, Gold began this recent run when yields peaked at 1.778, then and started to fall. Treasury yields are already up to 1.68 today. If we're lucky this treasuries rise doesn't last longer than a day and a bit like many of the previous jumps and if it starts to fall again it could give gold a second wind. Be nice if gold stays above 1800 - but I imagine some would definitely want the opposite!
I think that’s about right. What is happening is certainly counterintuitive, why anyone in an inflationary environment would be buying long term US Treasuries when they are from Day 1 seriously underwater in terms of a negative real yields is beyond me, it just shows you how hard wired investors are to buying US Dollars and Debt when they get bad news, even though that bad news in itself should be ringing alarm bells on the very US backed products they are buying and are in fact losing money on from Day Dot!
What is happening is straight out of the US Treasury / US Federal Reserve playbook Post WW2 in the US, they got rid of those debts by averaging 6% Inflation for about 7 years in order to get control of it’s Debt to GDP Ratios, that is what will happen now also, of course the US at that point had a <5% retirement population and no Social Welfare System, how that works when the US now has a >15% retirement population and a massive Social Welfare System and multi-trillion dollar budget deficits as far as the eye can see is anyone’s guess.
Short term they may get away with it, long term this gets messy.
I suppose the other thing is, gold has managed to stay pretty much level so far, despite the US10Y treasury yields jumping up.
You could basically call this another sign of strength for gold as it usually heads south when the treasury rates head up (earlier in the year, when the rates were at the peaks like this, gold was hitting its lows of the year).
In fact, whether the news is good or bad for gold, pretty much anything tends to see it get an initial hit, before subsequent moves!
Yes, multi-year high read outs on both the Core (CPI) and Non-Core (PPI) Inflation readings, if this “bleeds” wholesale into wages on labour shortages (it is in my field of employment) you can expect multi-decade highs in terms of Core and Non-Core US Inflation before the summer is out. The US Federal Reserve and the Financial Establishment will claim it’s all transitory, because if they were to do otherwise there would be a financial calamity in the US Dollar, US Debt and the Stock Market and the global financial system would follow suit.
I think this transitory inflation claim is the only thing the Fed can claim because they really don't want to raise rates and start a vicious cycle.
A bit like the Silver nonsense recently where the LMBA claimed to have over 10% more silver in their vaults than they've now admitted. They just bluff at key times (in the latter case when silver rises looked to be gathering pace).
Everyone can see inflation everywhere, from any of us in the supermarket, to Warren Buffett reporting on his businesses.
The fed can try and pretend this is "transitory", and some of it will be, but that's just a red herring, like Boris Johnson's claim he paid for refurbishment out of his own pocket (we'll just gloss over whether someone just stuffed that pocket with money).
The other game in town is bear and bull traps, I suspect traders will be all of this on the gold front.
The inflation data looks highly transitory to me. I would be surprised if the rally in gold continues but who knows how they will play it on USA open. Shanta does zippo.
Rocketing back up....looks like a dodgy stops raid so far.
Unless its a stops raid.
Inflation higher than expected - gold down - go figure.....
Vic: Off topic from this, but in case it helps you, as I can see you were after a faster browser, try using the Edge browser built into Windows now (or download it if on old Windows).
It's based on Chrome (basically the same thing) but rather surprisingly it's actually considerably faster than Chrome (or any other leading Browser) for a lot of machines (especially lower powered ones). I used to use Chrome and switched to Edge a while ago and have never considered going back for a second.
Why H2 when 28th June is the B3 deadline for unallocated cover ?
I agree Colonel for H2 assessment. It was just for this month we have some odd moves on gold to put up with.
booboo,
The markets are looking for non-transitory markers of inflation. So the headline number may look like a rocket ship rise, but its all the data underneath and where it shows inflation increases being embedded such as high wage costs. In some ways they need to compare inflation where it was two years ago in 2019 to remove all base effects and then divide it by 2 to get a proper 2020 price then a 2021 price from that. The market either dumps gold or they buy it on what they choose to read into it. If we find going to the restaurant is like going to the barbers of late and we have 30%-50% price increases, a lot of people won't go back again or maybe they try somewhere else or they frequent such places far less often. The effect then becomes transitory as the extra cash built up over Covid-19 may well evaporate by September. They also have new business operations completely replacing would be retired competitors and timings of market entry may increase competition in coming months. Those numbers may be dis-inflationary when they arrive especially if they want new customers. Its going to be really hard to read what gold will actually do in all of this. Tony
Tomorrow at 1:30pm BST. Judging by the wild swings in the markets today, it should be interesting if the numbers come in “hot”.