Declining Yield Curve And Gold

The entire rally in the precious metals since early June has come against a backdrop of short-term yields rising faster than long-term yields. In other words, it has come against a risk ‘ON’ atmosphere in which there is little anxiety about inflation or systemic stress.  That is not favorable for gold.

What has the precious metals rally had going for it?  Not the chart above, that’s for sure.  It has had gold’s price vs. some commodities (esp. crude oil) and stocks bouncing and that’s a positive. It had the blip in GDP going for it.  It also had a massive speculative short covering and long-biased momentum play in silver.  It had the usual gold bug touting about geopolitical strife and finally, some bank in Portugal crapping out.

But the chart above is not bullish for gold and it joins the CoT data for gold and especially silver as a negative, which finally manifested to some degree yesterday.  Now the idea is to find the buying opportunity.  Now it gets fun if yesterday (actually last Thursday, with the big bearish candles on the miners that NFTRH noted) was the start of the periodic games known (around here, anyway) as the Running of the Gold Bugs.