1/ #RealYield is the ultimate driver for #Gold price; to be exact, it's the #negative #realyield that had been driving the gold price!

An important historical fact was during the 1975 - 1980s hyper-inflationary period, #gold went parabolic due to #realyield going "negative"...
2/ Look at the above chart closely, #gold price started to bottom in tandem with #realyield dropping below 0%; conversely, #gold price peaked ahead of the #realyield turning positive.

In other words, gold price can be a leading indicator prior to the #realyield turning positive!
3/ Today's #gold price action (since Aug2020) is reminiscent of the period during #Year2011's peak where #gold price was dropping in tandem with #realyield prior to the bottoming in #realyield;

Gold price then turned decisively lower as #realyield finally bottomed.
4/ The million $$$ question is really, can more #stimulus #paychecks & #increase of #min.#pay into main-street's spending power drive a sustainable #inflationary pressure in the coming months?

If yes, then, #gold is at risk of #nominal #yield pricing a faster move > #inflation!
5/ Another very important take away from #Year1978 is this: when the #negatvie #realyield bottomed & rallied to 0%, #gold rallied along with it!

This is an important attribute that could sustain current #gold's uptrend should the #realyield bottomed again & rally towards 0%!
5/ What makes me think that when #realyield bottoms again #gold will rally like during Year 1978 and not Year2011? The answers lies in the #inflation itself!

When real yield bottomed in 1978, it was due to inflation!
When real yield bottomed in 2011, it was NOT due to inflation!
6/ In summary, as "real yield" (RY) = nominal yield (NY) - inflation "I":

🌈When RY ⬆️ because NY > "I" due to inflationary pressure, #gold⬆️!

💥When RY ⬆️ but inflationary pressure is ⬇️, gold ⬇️

😎This conclusion likewise fits the bill that gold is an inflationary hedge!😎
7/ Conversely:

🌈 When RY ⬇️ because NY < "I" due to inflationary pressure (e.g. Year 2009 to Year 2011), #gold ⬆️

💥 when RY ⬇️ but inflationary pressure is ⬇️ (e.g. Year2011 - Year 2012), #gold ⬇️

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More from @supercatmy

12 Feb
1/ The only time during past 10+ years when #realyield was positively correlated with #gold was during #gold's peak in Year2011 where the yield was down together with it initially;

#RealYield then bottomed & #gold continued dropping as it resumed the normal negative relationship
2/ The question is, are we in the same shoes now? (This is #GDX vs. #realyield)
3/ One more important observation, while #realyield was heading down from Sep 2011 to Sep 2012, #gold did not go up for the period as #dxy #usd was on the way up!
Read 4 tweets
11 Feb
1/ CNY falls on 12022021. Look at the date, read it backwards it's the same. It's called Palindrome - an auspicious date. Blessed Niu Year? 2021 Cheers Gong Xi Fa Cai

There are 20 strokes in 疫情,the Chinese characters for pandemic.
2/ There are 20 strokes in 痛苦, the Chinese characters for pain/hardship.

There are 20 strokes in 疾病, the Chinese characters for illness/disease.

There are 20 strokes in 生死存亡, the Chinese characters for life and death, survival and demise.

But hey, 2020 has gone...
3/ On the other hand, there are these in Chinese characters:

21 strokes in 健康, for health.
21 strokes in 幸福, for happiness.
21 strokes in 富贵, for wealth.
21 strokes in 和睦, for harmony.
21 strokes in 勤奋, for industry.
21 strokes in 崛起, for ascendancy.
Read 4 tweets

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