Below looks at the Gold/US Dollar ratio over the past 8-years. The ratio is testing a level that has been critical to Gold bulls for the past few years and we suspect it will be critical for it again at this level!
CLICK ON CHART TO ENLARGE
In a note on the role of gold as a "geopolitical hedge of last resort", Goldman chief commodities strategist, Jeff Currie, writes that while it is tempting to blame the rally in gold prices on recent events in North Korea - which have certainly helped create a bid in gold - they only explain a fraction, or ~$15/oz of the more than $100/oz rally since mid-July. Instead, Goldman finds that the events in Washington over the past two months play a far larger role in the recent gold rally coupled by a sharply weaker dollar.
Anxiety seems to be the word of the day in bond markets. While reports of North Korea moving its ICBMs managed to send 10Y Treasury yields 1bps lower, a Trump Tweet on building strategic forces in Japan and South Korea has sparked a solid bid in bonds, pushing 10Y back a 2.10% handle...
Traders - or algos - are increasingly knee-jerking on these headlines...
Next test looks like Payrolls spike lows. at 2.10%, as it's clear just how jittery markets have become.
Yesterday morning, with the US closed for holiday but with S&P futures trading modestly lower on the latest set of North Korean geopolitical fears, we asked "is this time different", referencing last week's similar setup, when futures gapped lower on Monday after the Kim regime shot a missile over Japan, only to surge into the end of the week.
Submitted by Bill Blain of Mint Partners
Blain's Morning Porridge: Is there actually any point investing in bond markets, and what are "alternatives"?
“They got a name for winners in the world, I want a name when I lose. They call Alabama the “Crimson Tide”. Call me Deacon Blues.”