Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Hyperinflation in Zimbabwe – It’s back, but maybe not for long
By: JP Koning

Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
By: John Rubino

Gold's Interesting Day
By: Rick Ackerman

Asian Metals Market Update: November-20-2017
By: Chintan Karnani, Insignia Consultants

GoldSeek.com Radio: John Williams and Louis Navellier, and your host Chris Waltzek
By: radio.GoldSeek.com

Gold Market Update
By: Clive Maund

Technical Scoop - Weekend Update Nov 19
By: David Chapman

Zero Hedge invites Financial Times to heed GATA's urging on gold suppression
By: Chris Powell

The Great Retirement Con
By: Adam Taggart

Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom
By: Gary Tanashian

 
Search

GoldSeek Web

 
The $'s April Showers Can Bring May Flowers to Gold


 -- Published: Tuesday, 21 March 2017 | Print  | Disqus 

By Market Anthropology

Regardless of how hawkish the Fed frames possible future rate hikes this year, we suspect a cyclical breakdown in the US dollar index to unfold. Moreover, by our estimates of the leading market breakdown in US Treasuries last November, the window for a dollar break appears to be now open and extended through April.

Similar to the failed breakout in long-term Treasuries last summer that subsequently resulted in the severe correction in bonds, the dollar index has followed the retracement pattern in long-term Treasuries as it currently flirts with last November’s upside breakout ~100. Should the index break below current levels, long-term trendline support will be tested directly below ~98.50 and likely fail.
*Click to enlarge images*

As we’ve noted over the years, the relationship between Treasuries and the dollar is highly dynamic, and at times – quite muddled – depending upon the time frame and markets you look at. Granted, this is true for all markets, yet even more so with Treasuries, in part due to the range of durations and also when intermarket correlations are interpreted through yields that inherently behave inverse to their corresponding bond. Simply put – it’s complicated to read and even more confusing to describe.

That said, from a macro perspective we have viewed the dollar following cyclical trends in long-term yields by several years, while over the intermediate term the dollar has followed more structural pivots in Treasuries by several months. 
Shorter-term – and as frequently seen in most intermarket relationships, correlations fluctuate between the positive and negative poles, with long-term Treasuries and the dollar index most recently exhibiting an inverse correlation extreme coming into January – the last of which was present during the previous cyclical top in the dollar in the first half of 2002. Consequently, when Treasuries broke down from the failed breakout last November, the dollar broke out. Since then, however, the dollar fell short of making new highs this month as long-term Treasuries recently made new lows.

Our interpretation is that the dollar is set to follow Treasuries breakdown lead with the last lagged pivot (~5-6 months) of the cycle, which should mark a pattern break as the dollar turns cyclically lower without a corresponding leading move lower in Treasuries. As we described in previous notes, while we wouldn’t be surprised to see a final leg lower in Treasuries manifest along the lines of the 1987 breakdown to complete the move, over the longer-term we like them from a relative performance perspective to equities. Moreover – and further out on the risk continuum, we still like the prospects of precious metals and commodities that should benefit as the US dollar turns down.


While over the near-term and through an anticipated cyclical pivot lower in US equities, we favor gold here – as it tends to find greater support through broader market weakness than higher beta commodities like silver and oil, on a relative performance basis over the long-term they should all outperform stocks.

http://www.marketanthropology.com/

 


| Digg This Article
 -- Published: Tuesday, 21 March 2017 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.