Below are interesting charts that may provide some hint on where GP is heading and the strength of it in the coming months:
During recession (shaded area), GP drop due to: 1) margin call 2) Smart money rotating from gold holding into lowly priced stocks.
Based on the above charts, GP decline is more or less over given that the time duration of ~7-8mths is up. The divergence of GP and the negative (5-Year Treasury Inflation-indexed security) is indicative of how GP is going to behave in the coming months. I would expect that GP will start to trend strongly in the up direction of the negative (5-Year Treasury Inflation-indexed security) i.e. closing the gap. If negative (5-Year Treasury Inflation-indexed security) continues to trend up (indication is that it will as inflation starts to kick in), then GP will move up very quickly in the coming few months to be above the high of Aug 2020 i.e. it will be well above that by end of the year perhaps above US$2,200 (gut feel only)
It is likely that DCN SP will be over 45c by next week as GP moves up strongly; indication is that DCN is now tracking more closely to GP instead of relying on the turnaround story.
Cheers. DYOR and above is just my optimistic opinion.
DCN Price at posting:
38.5¢ Sentiment: Buy Disclosure: Held
