There is much speculation across the investor universe about what influences Gold prices and vice versa. Today I will be focusing on the false theory that Gold prices lead treasury yields and that by extension, Gold signals market crashes.
The Financial Solar System
Taking a look at the chart it is clear that sometimes Gold prices parallel and slightly lead treasury yields. However, if we overlay the Dollar index it is astronomically clear that the only times that Gold does this is when the Dollar's gravitational pull temporarily alters Gold's trajectory. Gold prices at the root are inversely corelated with Treasury yields.
It is really that simple. The Treasury market is the Sun while Gold, the Dollar, and the Stock market are planets. As treasury yields ultimately dominate and inversely lead Gold prices, the Dollar acts as a secondary force.
Yields are the only pre-signal for Market crashes and it looks to me like another leg down is imminent. However, it also looks like the dollar is setting up for a relief rally which means Gold would plummet along side stocks before the Sun sling shots it to new highs.
The Financial Solar System
Taking a look at the chart it is clear that sometimes Gold prices parallel and slightly lead treasury yields. However, if we overlay the Dollar index it is astronomically clear that the only times that Gold does this is when the Dollar's gravitational pull temporarily alters Gold's trajectory. Gold prices at the root are inversely corelated with Treasury yields.
It is really that simple. The Treasury market is the Sun while Gold, the Dollar, and the Stock market are planets. As treasury yields ultimately dominate and inversely lead Gold prices, the Dollar acts as a secondary force.
Yields are the only pre-signal for Market crashes and it looks to me like another leg down is imminent. However, it also looks like the dollar is setting up for a relief rally which means Gold would plummet along side stocks before the Sun sling shots it to new highs.
