At bottom right we show a rather long-term chart of the combination of gold and bond prices. The chart shows gold futures added to three times the value of the U.S. T-Bond futures.
Most expect that gold only rises when inflation is a problem so it usually makes sense for gold to be strong when bond prices are falling. Yet, there is a very clear ‘line in the sand’ just over 700 that has acted as resistance since the start of 1981. In other words, while gold has been rising ‘with’ bond prices it appears to have run into a bit of a problem with a rather strange- but definitely formidable- resistance line. If it breaks through it... there is nothing but ‘air’ on the chart until about 900 but keep in mind that a lightening move on this chart (like 1982) still represents a span of many months.
We are dollar bearish and are looking for the DXY to move down to about 92. Our conviction ebbs and flows on this almost daily. We would prefer to see the dollar fall versus currencies like the Mexican peso, Brazilian real, and Cdn/Aussie/NZ dollars rather than strictly the euro.
Commodity prices still look good through all of 2003. We are still positive on coffee. Cotton futures have run into major resistance. We are watching rice (XAU above 82.5) and beans.
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At bottom right we show a rather long-term chart of the combination of gold and bond prices. The chart shows gold futures added to three times the value of the U.S. T-Bond futures.
Commodity prices still look good through all of 2003. We are still positive on coffee. Cotton futures have run into major resistance. We are watching rice (XAU above 82.5) and beans.
