Why PM prices will go higher., page-150

@Thessaloniki

not sure if im explaining this well enough - but that information is part correct. but only part

the 0.52 correlation of us inflation adjusted 10s to gold price basically tells you that in a nutshell

gold paper market may sell off as a result of NFP prints but its often untrue to think that is a result of higher real interest rates - sometimes it is sometimes it isnt

between 2012 until past 18 months it generally was because the US govt pci and pce inflation data they elected to print were on a falling trend.

now govt printed inflation appears on a rising trend - so even if US yields rise - real rates may still fall - though you wont know until inflation gets reported

and the real deal is that US investment banks typically launch paper comex precious metals smackdowns under cover of NFP and fomc announcements - regardless of what the economic fundamentals actualy imply for gold price.

perfect example was the big sell down at start of May after the 5% cpi print. gold fell hard for 24 hours. then went on a ~6 week 30 degree up move

further - on what sets gold price - here's the 20 yr view of that inflation adjusted UST10s/gold chart you linked over the weekend.




As you can see the correlations that drove gold during 2012-2021 were very different to those in charge between 2000-2011gold's price drivers change over time. it is never simply USD and US real interest rates.

Those are very important - 2 of the 4 major drivers. But they arent the only ones.

the mistake many people are making - including your source - is classic recency bias.

10yr inflation + USD has appeared in charge recently so peoplke think they are always in charge.

Same as king USD cycle meant few owned USD gold/silver exposure in April 2021whats true prior doesnt always remain true.

and its definitely never true for gold that its only priced on USD and real 10 yr interest rate.

those 2 factors are always the obvious factors influencing short term direction and degree - but US debt and deficit/trust in USD fiat typically has the biggest bearing on amplitude of moves.

which is why precious metals have a habit of launching big surprise moves that are totally missed by market people who are superficially sophisticated but not economically fairly deeply informed