gold, page-93960

another wild week for sure

gold finishes slightly down as bond rates in usa and globally catch up with it, DXY is also, now nearing 93 despite creams of a crash of 30 % coming on 6th jan when it was on its low of 89 ish.

rates in USA continue to rebound despite a massive dip mid week - some say its inflation expectations, fed says its a show of confidence - i say its principally driven by the fed who continue to dump  massssssssssive amounts of treasuries (it has built up over the years)  in a really short time to raise cash no doubt to partly pay for some of the stimulus.

Despite an agreement to continue to be accommodating and to buy a set amount of treasuries per month, (120BLN, from memory) the fed has been really really really big NET sellers of treasuries, and when you are the biggest owner of the treasuries market, when you are a net dumper, that drives up interest rates, and as they get driven up, the currency follows as many overseas investors or locals repatriating cash bring it back to USD to get some of these much higher interest rates on risk free investments.

Seriously, check out this data,

as highlighted a few times over this year, FED is a big net seller of treasuries holdings, at one time this month they sold just over 8Percent of their entire book in 5 days and as interest rates spike causing the equities markets to swing wildly, t

he fed said, oh ,

it shows confidence,

we are still buying, which of course is true, they are still buying (trading) but selling MUCH more than they are buying.

Federal Reserve Board - Recent balance sheet trends
- treasuries balance green line, wow that is a huge rapid sell down - just on this month data series....started 2 march with 1.420 Trillion,,,,latest data three weeks later
1.031TRillion   --------  that 27.4% of the entire holding dumped onto the market in three weeks.

that enormous..... probably explains the repo market coming back on line in the last couple of weeks with billions lent to banks at ZERO overnight rate,,,,they had to probably fund the banks to purchase the goods being sold, and if you look at the top line in selected liabilities you can see the banks have actually been taking the strain, but requiring much higher interest rates and it appears a few loans

-----

so they started building the position (buying treasuries) to pull down and suppress interest rates in 2007 /08,,,the balance was 4.4 BILLION

now they are selling 389BLN in three weeks!!!!, if there was any clearer reason that rates are spiking upwards, this is it

My guess is they will keep doing it, drive rates and drive the dollar higher after years of suppression to get the cost of commodities which are in part being driven by speculation down, they do not want anything other than a transitory spike in inflation figures yoy which is expected for the next few months...

USA need to break rapid  reflation trade imo, it doesn't want it going too bizerk and I think their ongoing trading behavior  will continue to pressure and cap gold and all usd demonstrated commodities.

I know its not a general theme, but i  still think the target of at least 2% on the 10 year and DXY back to at least 93.5-95 this year is still possible


good luck , insane data out from the fed