In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Real Yields Roll in Favor of Gold
There has been plenty of evidence suggesting a significant breakdown in one of the world’s most critical inflationary assets, Gold. Miners look terrible, Silver and Platinum are weak, and the Silver/Gold ratio recently hit multi-year lows. These aren’t the type of data points that support higher gold prices. Real yields are another piece of evidence we can add to that list. The chart below shows the US 10-year real rate inverted and a chart of Gold. They look almost identical. Gold futures tend to trend lower when real rates rise (moving lower on the chart). Despite every reason to break down, Gold has remained resilient. And now, as many of the negative data points mentioned above begin to reverse, including real yields, a rally in gold could ensue.
