/biz/ - Business & Finance

Thought I would post this for some of you /pmg/ folks: pic is showing the correlation between inverse treasury bond price (ticker is TBF, as a proxy for yield), and gold.

There are those predicting major disruptions in the bond market which may cause a spike in yields and maybe another correction to gold prices. Steven Van Metre in particular was calling for a pretty sharp correction in the near term even in excess of march levels. I don't agree with his projections, but I think it's good for people to be understand that bonds are one of the major catalysts for gold price movement. Particularly if gold is overbought a yield spike can trigger a knockdown (note the difference between August and June).

I don't think gold is still overbought, and is largely done with its consolidation at this point, but the risk of yields spiking (especially before the election) is non-negligible, so consider taking a hedge using bond prices and drawing down any margin % you are using or making some cash ready just in case. Personally, I am pilling cash into my account and holding it, and am considering 1-2k in 16$ TBF calls as a hedge against downside risk.