The chart below of US Treasury bonds is very revealing. This morning I had a quick look at it and moved on. But then something caught my mental eye so I went back for a second look. Then I realised it is almost an exact copy of the gold price for the last 13 years!!!!
This simply means that the biggest driver by far for gold is interest rates, something I have told you before, but in this one chart it is accurate right up to the last few weeks. Note all the chart indicators are turning up, telling us the bond price will be rising for some time. By definition this also means that interest rates will be dropping for some time too.
In summary this is one of the most powerful pieces of evidence we have a major trend change under way in the gold market, driven by falling interest rates. Combine this with a breakout in the two year bear market for commodities (eg coffee has doubled in price in the last few months) and we have emerging inflation with falling interest rates.
Couldn’t be better for gold.