Cup and Handle on GOLD
If Gold continues its uptrend next week, I think the breakout will be in motion. Otherwise, Gold will continue to be squashed for another few months or so.
What is interesting is what Gold rising will mean for other assets and the macro environment in general.
Currently, gold actually does tend to rise with stocks since its a bet on yields staying low
The higher yields are on treasury bonds, the lower gold moves.
You saw this on Tuesday when Yellen scared the market by implying rates may rise.
In the future, when this pattern completes, will this correlation still hold?
Will yields actually go negative if gold is allowed to move?
Or will the correlation break down?
Something to keep in mind.
What is interesting is what Gold rising will mean for other assets and the macro environment in general.
Currently, gold actually does tend to rise with stocks since its a bet on yields staying low
The higher yields are on treasury bonds, the lower gold moves.
You saw this on Tuesday when Yellen scared the market by implying rates may rise.
In the future, when this pattern completes, will this correlation still hold?
Will yields actually go negative if gold is allowed to move?
Or will the correlation break down?
Something to keep in mind.
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