Hey tradomaniacs,
lots of Robin-Hood-Traders are asking themselfs: Why is gold and silver dropping?
Well it can have a lot of reasons such as Profit-Saves due to the overbought situation, the fact that stock-market continues to climb and SPX500 is almost at its All-Time-High (portfolio turnover).
It can be the fact that DXY (US-DOLLAR-INDEX) is oversold and so likely to retrace.
There can be a lot of reasons but one very obvious correlation that makes sense: US BONDS YIELD went straight up after hitting an all-time-low.
Why is that? When there is still uncertainy and fear the stock-market all the institutional traders are looking for save havens.
Save havens are usually alternatives to stocks such as metals, currencies like YEN and CHF or BONDS as you get a safe and fix return for your investment.
But what if the interest rates are too low? You look for alternative assets which are not interest.
Gold has always been a save haven, which is the reason why the current rally makes no sense.
Why would CHF, YEN, metals such as Silver and Gold climb at the same time? Because the market is uncertain!
Gold currently has a negative correlation with US-BOND-YIELDS as it is a no interest asset and a good alternative for a low-interest-market.
Watch these YIELDS when you do your analiysis for gold. ;-)
LEAVE A LIKE AND A COMMENT - I appreciate every support! =)
Peace and good trades
Irasor
Wanna see more? Don`t forget to follow me.
Any questions? PM me. :-)
lots of Robin-Hood-Traders are asking themselfs: Why is gold and silver dropping?
Well it can have a lot of reasons such as Profit-Saves due to the overbought situation, the fact that stock-market continues to climb and SPX500 is almost at its All-Time-High (portfolio turnover).
It can be the fact that DXY (US-DOLLAR-INDEX) is oversold and so likely to retrace.
There can be a lot of reasons but one very obvious correlation that makes sense: US BONDS YIELD went straight up after hitting an all-time-low.
Why is that? When there is still uncertainy and fear the stock-market all the institutional traders are looking for save havens.
Save havens are usually alternatives to stocks such as metals, currencies like YEN and CHF or BONDS as you get a safe and fix return for your investment.
But what if the interest rates are too low? You look for alternative assets which are not interest.
Gold has always been a save haven, which is the reason why the current rally makes no sense.
Why would CHF, YEN, metals such as Silver and Gold climb at the same time? Because the market is uncertain!
Gold currently has a negative correlation with US-BOND-YIELDS as it is a no interest asset and a good alternative for a low-interest-market.
Watch these YIELDS when you do your analiysis for gold. ;-)
LEAVE A LIKE AND A COMMENT - I appreciate every support! =)
Peace and good trades
Irasor
Wanna see more? Don`t forget to follow me.
Any questions? PM me. :-)