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Bondyields

GOLD and BOND yields. Can they rise together?A lot of talk has been done lately regarding Gold's continuous drop and its correlation with the bond yields and rightly so. As the chart below shows, since 2015 in particular the negative (inverse) correlation of Gold (XAUUSD) with bonds (US10Y in particular used in this study) is evident. Every time the bond yields rise, Gold loses value as the two are in direct competition as low risk financial assets. Bonds in particular offer yields, a characteristic that Gold hasn't. So as the chart above shows, the story hasn't been any different since the COVID pandemic struck the Western World in February 2020. The bonds got sold even lower and while they've been accumulating, Gold was used as a counter-inflation asset and rose aggressively. But since the August peak, we've seen Gold continuously being sold on Lower Highs, while bonds haven been rising and even above their March peak. So will this correlation hold that will have Gold continue to fall as long as bond yields rise? The answer can be found on their historic multi-year regression, which is shown on the study's main chart. As you see my focus is on two periods: * (1) The Resistance break-outs . When Gold broke its 2011 Resistance (at the time All Time High) last July and when it broke above the 1996 Resistance in 2004. Those patterns are fairly similar in the sense that they both initiate a new Bull Cycle for Gold. * (2) The start of the Quantitative Easing in 2008 to tackle the financial aftermath of the sub-prime mortgage crisis and the start of a series of stimulus to deal with the COVID19 crisis. (1) As you see on the chart, when Gold broke above the first historic Resistance in 2004, it got immediately rejected back below it, similar to what happened on last July's break-out (and what we currently witness). At the same time, the US10Y has already entered a Channel Up from mid 2003 until mid 2007. This didn't affect Gold's trend, which as it recovered from the initial Resistance rejection, it continued its rise throughout the bond rise. Since the 2020 Resistance break-out has so many similarities with 2004, we may see Gold having a similar long-term bullish trend (a new Bull Cycle) regardless of the rising yields. (2) That brings us to the comparison between the two "money printing" (or call it monetary easing if you like) periods on the chart. When Quantitative Easing 1 (QE1) was introduced in November 2008, Gold naturally started to rise (after an 8 month drop due to the market meltdown because of the sub-prime crisis) naturally as the market treated it as a counter to the upcoming inflation. At the same time while the yields initally fell, they started to rise (even on a very aggressive tone) in tandem with Gold. The situation brings resemblances to the current times. On March 2020 the first stimulus package was voted to offset the potential consequences (lock-downs) of the COVID-19 pandemic. Gold was again immediately bought as a counter inflation asset while the yields after an initial fall and accumulation phase, the started rising (which is still the case to this date). The above two key landmarks on Gold's historic price action, show that Gold and bond yields can rise together, in fact in times of monetary shocks such as November 2008 and March 2020, that seems to be the norm. Does this mean it is only a matter of time before Gold resumes its long-term bullish trend within the currenct Cycle, regardless the fact that the yields may continue to rise. In my opinion yes and the catalyst can be very much be the upcoming vote on the new stimulus package. But what do you think? Are you expecting Gold and the bond yields to rise together in the coming months? Feel free to share your work and let me know in the comments section! Please like, subscribe and share your ideas and charts with the community! -------------------------------------------------------------------------------------------------------- !! Donations via TradingView coins also help me a great deal at posting more free trading content and signals here !! 🎉 👍 Shout-out to TradingShot's 💰 top TradingView Coin donor 💰 this week ==> Vergnes --------------------------------------------------------------------------------------------------------
FX_IDC:XAUUSD
by TradingShot
21
US10Y VS S&P500 Dividend Yield = Market Crash?US10Y = 1.215% (yellow line) S&P500 = 3955 points (orange line) S&P500 DY = 1.48% Personally, I think the catalyst for the next correction in the stock market may come directly from the bond market. The logic is this: if the bond yield (US10) were to return 1.40% why should I take on more risk by investing in the stock market with a dividend yield of just over 1.40%? As an investor, I would prefer to sell equities and buy some bonds. Surely the FED will intervene with control of the yield curve in order to avoid a sharp downward acceleration.
TVC:US10Y
by Moneyrockstarsss
1
This Signal in Bond Yields Will Predict the Next Recession.After one of the most unexpected years, I thought I should take a step back and look at macroeconomics a little bit, at one specific chart that I've been watching. That is the German Government 10-Year Bond Yield (DE10Y). I've been anticipating a signal in that chart that will indicate massive shift in global market trends and will bring us closer to the next imminent recession. That signal is the breaking of the decades-long descending wedge. The momentum is still bearish, and this week the price got rejected at the upper line of the wedge. If this continues downards, then the economy remains in the same state. Central banks are printing currency at an unprecedented rate, and inflation is showing on commodoties and stocks and everything else. Governments are sinking more into debt, and the best place to put your money remains the stock market. That is until this wedge breaks. Because when it does, the bond yields will accelerate upwards. It will become more costly to borrow money. And the economy will slow down again. But this time, it is slowing down while everyone is extremely leveraged and deep in debt. We want to maximize our profit but we do not want to be caught in that state. That is why I pay attention to this chart and the DXY. There are many charts that can indicate the same outcome, but I choose to focus on one only that does the job. Now according to some Fibonacci levels, I predict another touch in October 2021. By then, perhaps the majority of zombie companies will have declared bankruptcy. Is it too soon for that? Will government regulation delay that even further? No idea. Too many factors to watch. So let's keep watching this one key chart.
TVC:DE10Y
by TechNerdOmar
Bond Update #bondsThis breakout trade out of the December range (rectangle)to the downside to the lows set back in March has been even better then expected but as we approach those lows it is decision time again. Because I have good trade location I am going to hold the short position even if we get an immediate term bounce. I am watching to see if we can hold below 169'00. If we can the downtrend is still intact. How price reacts here at 167'00 will be interesting to watch though because if rates are really going to rise this time, the down move could be strong if we can make it below 167'00. Despite the FED and the economy not fully being open, bond yields are certainty indicating inflation for now.
CBOT:ZB1!
by IngenuityTrading
2
US INTEREST RATES - To Go Through The Roof. Here's The Evidence.Using the very latest advances in my AriasWave analysis I bring to you the breakdown of the US Bond Yields AKA INTEREST RATES. What do you think higher interest rates will do to the global economy? Leave your comments below. My analysis using the AriasWave methodology is improving at a rapid rate. Once you learn how to do proper research you will no longer rely on indicators or hunches. Get ready because things are about to get messy in the debt market. Please LIKE and FOLLOW to get notification of updates and future posts.
TVC:TNXLong
by AriasWave
8
$EURUSD Weekly Outlook - To Summarize - ShortCoT has the commercial banks shorting the EURUSD still. Yeah, they added a few long positions this weel, but that was to get back to a level they wanted to add more shorts. They/ve been shorting since the height of the Pandemic swing. so for the Central banks to start being profitable, the price will have to be below 1.13500. If you draw a fib from the start of the EURUSD commercial shorts to the height of the commercial shorts, you can see it unfold in the fib extensions where price wants to reach. I personally like to see a bit of a larger retracement to the green box notated in this chart during the London/NY session before aggressively going short. Plus theirs divergence in the 10 year bonds between the currencies. As most are going up, the EUR is taking a dip as of recent. DIVERGENCE IN 10 YEAR BONDS Strong Bear tendencies this week. It will be London op and NY open to find the best setups to go short.
Short
by BodiesXWix
3
GBP STILL BULLISHlooking at the chart we have marked out key levels with active Options strike prices supported with high volume and open interest. We plan to observe how price reacts at 1.3300 and 1.2500 levels prior the the expiration of these contracts. In terms of price action , Cable still maintains an upward trajectory in line with non-commercial sentiments and seasonal outlook. UK bond price maybe trending downwards in line with its inverse relationship with the GBPUSD. However, the Brexit fears may invalidate this move if the trend line is broken and prices fall below 1.2500
Long
by dynamiquebd