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Gold target range 15000-45000 USD: fundamental discussionThis chart depicts the gold price in dollar for the next decades. As a background it is highly recommended to view my idea here: This chart depicts the US gold reserves divided by the interest on debt. The interest on debt is calculated as a proxy by multiplying the 10 year interest rate with the total federal debt. Whether this is accurate or not is not so important as we just want to compare this ratio with its historic values. It is important to note that official US gold reserves have remained unchanged since the closing of the gold window in the early 70's. This metric has risen and fallen quite a bit. First this metric rose during the stagflation of the late 70's. The gold reserve of 262 million ounces hit a high of 222 billion whilst the yield did a first peak to 13.5% with the debt, barely over 900 billion our proxy interest was about 120 billion and thus the gold reserve was almost able to pay it off twice. It is my belief that the rise in gold prices and with it the value of the US gold reserves is what cooled the debt market causing it to revert course into a 4 decade long bull. Interest rates plummeted, federal debt rose faster, and gold also went down in price. At the turn of the century gold found itself trading at 290 dollar, the gold reserve reduced to 76 billion, the US debt grown to close to 6 trillion and the treasury rate reduced but at times peaking to close to 7%, the ratio hit a low of just 0.2 years of interest on debt that could be paid by the gold reserve. The next 11 years were marked with a continuing of the bond bull run whilst also gold rallied to a new all time high. By 2011 and 2012 the ratio hit close to 2 years again thanks to gold trading at 1800 and the yield as low as 1.5%. Since then, rising yields and declining gold prices have hit this ratio back to about the middle range. Technically, not much can be said where we go from here so we'll have to take a look at the fundamentals. While multiplying the 10yr with the debt is a nice workaround to picture the interest on debt by tradingview the real interest on debt is more difficult to compute. The US debt consists of bonds with various denominations running from 30 year bonds to bonds with maturities of less than 1 year. This means that of the 30 year bonds, most have been issued in the 1990's and 2000's and the interest paid on them is the yield of those bond at the time of issuing. In fact the 30 year bonds that are maturing today have been issued exactly 30 years ago with a yield of almost 9%. When they mature, they are rolled over in new bonds that -even if we had a small tick upwards in the last couple of years) - have a significantly lower interest of just over 2%. The same holds for 10 year bonds which 10 years ago had a yield of 3-4% vs 2.6% today. This effect is what caused the actual interest on debt (www.treasurydirect.gov) to not even double from 214 billion/year in 1988 to just 402 billion/year as recent as 2015 whilst the federal debt exploded over 20 fold from 900 billion to 19 trillion dollars. However, all good stories must come to an end and this one is no different. The bond market has been topping out for the better part of a decade now and yields have seen some upward momentum. This has meant that a lot of treasury auctions saw the treasury forced to roll over their 5, 3 and 1 year bonds into new bonds with a higher yield than the old one. Whilst the treasury can steer and man-oeuvre a little bit by opting to sell short term bonds when yields are high and long term bonds when yields are low there is ultimately no escape from market reality. This has become clearly evident from the last prints of interest expenses on debt outstanding that have risen with 9.1% per year for the last 3 years and show now signs of abating with another 8.6% rise for the first five months of this financial year. This is in stark contrast with the 2.36% increase of the previous 27 years. I would venture to guess that if nothing is done on a policy level to tackle the accumulating debt and rock the bond markets gently to sleep once more we will enter a spiral of increased debt issuance met with stable or declining demand which will push up yields which in turn will create the need of issuing more debt. This viscous circle will only end through a spectacular rise in the price of gold. In a previous analysis I had already outlined a possible scenario of the 10 yr yield hitting its magnet level of 7% by 2025. Given the current debt of 22 trillion, which is increasing at 1 trillion a year, it seems likely that by the start of 2025 we will be looking to a national debt in excess of 30 trillion dollar. At a ratio of 1.8 for our gold reserve to interest expense on debt ratio we learn that the US gold reserve should be valued at 3.8 trillion dollars. For this gold would need to rise to at least 14500 dollar. If for some reason the debt markets stay irrational for a very long time before going in overdrive it could very well be that the US ends up with a 50 trillion dollar debt by 2035 when this scenario fully comes to fruition. In such a scenario I see no reason to expect that the 10 yr yield would only stay limited to 7% but could easily hit the 1980 value of 13.5% again. In order to calm the debt markets at these yields and these levels of debt gold would have to rise to about 45000 dollar to repeat the 1980 scenario. Hold on to your horses.
FX:XAUUSDLong
by fatjohn
5
Yield explosionThe yield curve is still in a bear market. Downward trending resistance at 3.1% Once that is broken, it could easily go up to 7% which will act as a magnet due to it being a historical support line (1973-1992) and resistance (1992-2000). This would be disastrous for the US government as interest on debt would rapidly rise. More fundamental reasons of why the yield curve would go up is off course the US debt which is absurdly high. There is no reason for lenders to keep lending at these low yields. Russia stopped doing it and sold all US treasuries, China stopped doing it and now that the babyboomers are retiring they are stopping as a buyer as well. Soon only the fed will be a buyer of these bonds. Long term up is the only way to go for yields and the road is open until 7%. This would cause a panic since the US will have it very difficult to service the debt without creating more bonds, enlarging the supply. Very good news for gold (65% of the monetary reserve of the US) which could be doing extremely well just as it did in the 1970's
TVC:TNX
by fatjohn
USDRUB fundamentals and bond spread.Russian GDP annual growth rate is expected to come out February 1 with an increase of 0,70% from 1,50% to 2,20% while GDP in April is expected to fall into a 2,10% growth rate, Agricultural GDP is almost at 2017 levels, and will likely contribute to a stronger ruble. Manufacturing and construction GDP is also inching for a strong growth rate this year. Exports is at 2013 levels and have increased from January 2018 to November 2018 with 20,44%. Increases in export are expected to hold its momentum and increase throughout 2019, giving Russia a positive trade surplus. Higher oil prices is also contributing to the GDP growth. Consumer confidence is at -17.. While consumer spending is almost at its highest. Disposable income is at 0,10% and is expected to rise by 0,40% this year. Retail sales advanced 2,60% in 2018 compared with 1,30% increase in 2017. Retail sales is expected to rise modestly in 2019. Wages and living wages have increased in 2018. Unemployment rate is at historically lows since mid 2018. Overall, i see Ruble to gain this year against the Dollar. Holding shorts, and will increase position when/if break of 64,400, 62,750, and 61,000 if we reach that far :) i will be looking at hedge opportunities. Keep in mind that Russia is still a risky trade, with sanctions imposed from U.S. and Europe. So, the whole think could turn against me. But from the fundamental perspective, i see a bullish ruble. TradingView does not provide data from RU10YT. But if you can find the data, then compare it with US10YT and you would see a that spreads are narrowing between those. This could indicate more demand for the Russian 10-year bond as the yield is decreasing.
Short
by Fx-AlphaStrats
Gold shines with falling real yields This chart compares the real yield of 10 year Treasuries (bottom red) to XAUUSD (top). The real yield is the yield that a treasury buyer can expect to earn after inflation (nominal interest rate minus the inflation rate). At a glance there's visibly a strong negative correlation between real rates and the price of gold over time. Research by _Erb and Harvey showed a negative 82% correlation between real interest rates and gold prices from 1997 to 2012 (The Golden Dilemma). The real yield on long term treasuries was over 3% in 2000 and fell to a negative yield in 2012-2013. During this period of time the price of gold gained over 600%. And in reverse from 2012 the real yield increased approximately 1% to 2015, while the price of gold fell almost 40% during this time. Gold is relatively expensive when the real yield on treasuries is high, and relatively cheap when the real yield on treasuries is low. If an investor can gain a high real yield after inflation by holding a 'risk free' treasury, then the opportunity cost of holding gold is comparatively high. This makes gold relatively less attractive since gold pays neither dividend nor interest. Treasury investors lose money during negative interest rates (when inflation is greater than the nominal interest rate). This makes gold more attractive despite having no yield.
ULong
by dime
1
#FXinsights #TradingViewTOOLKIT Jan2019 \/Bonds /\Yields inFOCUSOriginal charts of these trades available at thinkorswimTOOLKIT.com with #TradingViewTOOKIT link US10YR LONG YIELDS Short @ 3.11 targeting Jan 2018 levels 2.55 NOW LONG BIAS from 2.55 with Key Levels, MarketDEPTH, and proMETRICS Momentum Metric Reversal (thin histogram line with "The Great Gatsby" Alert and Cloud Oscillator) [ ] Price Action Metric Reversal is when the histogram column reverses higher than 2 bars previous at peak high /low ZN1! SHORT 10yr NOTE Short 122'22'0 / 121'12'0 TARGET LEVELS 121'11'0 121'19'0 119'26'0 Price Action Reversal SHORT with "The Great Gatsby" Alert signal [ ] Momentum Metric Reversal (thin histogram line with "The Great Gatsby" Alert and Cloud Oscillator) [ ]
TVC:US10Y
by cisTRADING
Yield spreads say more selling aheadDuring several previous liquidity crisis in 2001,2008,2012, 2016 the investment grade corporate yields spread over treasuries hit 200+ bps ... right now at an average spread of 150 basis points, may suggest more pain ahead before capitulation is reached. In other words investment grade corporate bond yields may be still too low. Based on what we've seen during several previous liquidity crisis the cost of borrowing in corporate credit may need to rise another 50 basis points before this is over.
M
by dime
2
DE10Y / D1 : already showing signs of upward trending to come.We may show some short term demand on bonds because of equities volatility that I already expect. But I think anyway the EU bond market will remain under the bigger catalyst that this market will have to forecast new prices to settle to after ECB will pull out in december. My trading plan here is to remain bullish on the december future expiration and buying all interesting pullbacks. Hope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) That's the best way to support me and help pushing this content to other users. Kindly, Phil
TVC:DE10Y
by PRO_Indicators
Risk Off? Treasury yields set to drop.I posted a while back that the "rising rate" mantra may not be as sure as most think. To recap my view in brevity: Rates are up against a multi-decade long falling trend line, so it'll take more than a few sessions or weeks to overcome. I do believe that rates will be higher if you're looking out years or even decades, but shorter- to intermediate- term, the technical picture suggests rates are more likely to fall than rise. This chart has a lot going on, so let me explain. First, we appear to have formed a head and shoulders top, and Friday's close was essentially right on the neckline. If that neckline gets broken, the downside target for TNX is at 23.19 (2.319%). That level nestles in comfortably between the 61.8% and 78.6% retracement levels of the swing from the lows in September to the highs this year. Furthermore, there are two breakouts that remain untested. The first, or the "major" one, is around 26.00 (light red shaded area is the range). The second, or the "minor" one, lies just south of 25.00 (orange shaded area is range) and aligns with the aforementioned 61.8% retracement. Also worth pointing out is the bearish divergence in the RSI's trend (white line) marked with the yellow circle. The MACD also confirms this trajectory lower (the other yellow circle). In short, it looks like rates are headed back to 26.00 at a minimum, or more likely even further to the confluence of levels between 22.50-25.00. Rising rate environment? Sure doesn't look that way to me... (PS - I marked this as "short" because of the inverse relationship of bond prices and yields. So I'm bullish on bond prices, bearish on bond yields.)
TShort
by EchoAlphaBravo
Global-Review / May 28th : Waiting for VIX sellers to fail !Hope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) That's the best way to support me and help pushing this content to other users. If you want to see my chart more closely, click the share button below that video.. You will be able to have access to the chart used in that video. Indicators used in this forecast are PRO Sinewave BETA & PRO Momentum . You can check my indicators via my TradingView's Profile : @PRO_Indicators If you have questions about the topics discussed in that video post a comment with "@PRO_Indicators" handle. Kindly, Phil If you want to learn more about the basic rules to trade with my indicators here's the educational video link :
FX:SPX500
by PRO_Indicators
Silver - Price in Bottom of Range of the SLV, Is It Going Up?Silver - still a good entry point as the last couple days, and moving up from the bottom of its range. There is a whole, whole lot going on in the silver (and gold) story, but that's another article. For now I'd like to point out some action on the SLV 's chart. Silver has been bouncing in a tight range for much of 2018. Buying in the low $15's and selling on the way up has worked for a lot of this year. Betting against silver has worked too, but because of the accumulation of physical silver by several large entities and for other reasons, I don't believe price will stay this low much longer. Silver is being pushed lower by a stronger dollar, rising yields, and a host of other factors including competition with cryptocurrencies as a place for capital to go. But sentiment is rising for silver as a standby that, put bluntly, isn't gold and isn't subject to gold's issues; in addition to being recognized as a safe asset that has strong potential for appreciation as other things - markets, stocks, bonds, cryptos, presidents, deals, etc. - decide what they want to do. In the interest of simply disseminating a good entry point in the SLV and saving a more in-depth article for later this week, I'll cut this short and just point out the action in SLV's price - indicators and patterns alike are pointing to upward movement out of the bottom of the range. Please like, follow, and share, and maybe we can have fun and do great things together. Thanks again! See it on the site: holsturr.com/category/markets/charts/ ** For speculative and research purposes only - good luck! **
AMEX:SLVLong
by holsturr
Cup-&-Handle in the TBT- Interest Rates Going Higher, Tax Probs?Hold tight for this ride, there's a variety of reasons why bond prices will stagnate or fall. Interest rates should rise and be higher than they are now; "should" certainly isn't a reason for something to happen, but there are scant monetary policy maneuverings available for the Fed to keep interest rates low and by extension, prop the stock market up much longer. The TBT - ProShares' 2x Short 20+ Year Treasury Bond ETF - is an exchange-traded fund that seeks to double the inverse of the U.S. Treasury Bond index on the daily. When bonds do poorly from falling prices and/or higher yields, TBT rises and seeks to double the fall of long-term treasuries. There's a lot of reasons treasury bonds don't look so hot in the foreseeable future. Let's first be honest about the state of the economy - it's not doing as well as the Fed and economic experts might lead us to believe. 1. Data continues to show GDP is not as strong as predicted. GDP estimates are coming out crazy high. It's alarming to watch as the real numbers are revised lower and lower. 2. Input costs of all types are rising. Trade concerns and commodity shortages are leading to higher input costs in sectors across the board. 3. Unemployment numbers don't reflect reality. The unemployment numbers themselves might be valid, but the way they are calculated today is misleading. Experts claim that unemployment for college degree holders is below 2%. If the assessment is based on simply whether or not degree holders have a job, that might be true - but the numbers are false with regard to the reality of America's employment situation; an engineering graduate who is cooking pizzas for $8.50 an hour might have a job, but their pay grade is a fraction of what it would be if they could find employment in their field. Record-low unemployment numbers are no good when it means law school graduates are working as office receptionists and scientists are waiting tables, etc., and that's a more prevalent situation than what experts might lead us to believe. 4. The tax cuts aren't - and won't - help the middle- and working class as intended. The stated goals of Trump's tax cuts were to repatriate offshore money and bring corporate tax rates to competitive levels with countries like China. Those goals may be becoming realized, but the end result is not beneficial for the little guys. We've heard feel-good stories of employers tossing out $1,000 bonuses to employees, etc., but the reality is companies are using the favorable tax situation for stock buyback and M&A (merger and acquisitions) - and as a whole that benefits people at the top much more than professionals in the middle or workers at the bottom. So, the overarching situation is this: tax cuts aren't helping the everyday worker as much as experts might expect, and workers may be finding employment but they are underemployed and underpaid. Bottom line? Lower tax receipts with unfettered government spending will mean the U.S. Treasury will need to issue bonds. Bond prices will flounder and yields will rise - just as the Fed will presumably need to start printing money (QE 4?) - begging a couple questions: How are bondholders going to get paid? How is the strength of the dollar going to be maintained? Simply put, there are fundamental reasons for the price of the TBT ETF to climb higher. Similarly, there are technical reasons for the TBT to rise too - a cup-and-handle has printed in TBT's chart. This indicates higher prices in the future. A TBT trade is a little more involved than most, but could pay off with big returns on investment as the story plays out. Please like, follow, and share, and maybe we can have fun and do great things together. Thanks again! See it on the site: holsturr.com/category/markets/charts/ ** For speculative and research purposes - good luck! **
AMEX:TBTLong
by holsturr
Big spread between 5 y to 30 y treasuriesWatch this immense gap between the 5 y treasuries and the thirty years bonds. It will close sooner or later and I don´t expect the 5-y to fall or not far enough to close it. We´ll see probably a fast rise of yields in the 30- y bonds and this will cause much losses to the investors who are not aware of this. Sure, the indicators are signalling a correction in the near time. But with the FED prognosting more little steps of rising interest rates, a shorting of the QE and with positive signals coming from economy and labour market, I expect the yields going up in the long run.
F
by Luettis
mother of all charts US 10 yr yieldshigher dxy real rates spread increse => pressure on gold prices? bearish for across the board EM assets terrible news for etf managers china to start thinking about all the 1.3 bn usd worth of almost 0 yield US papers they hold imf and wb funding become more important => sharing policy making decissions with the west again .... for the sector, it means importance of the managed funds will increase. stock picking will be the name of the game again thanx god....
TVC:US10Y
by tncckn