Gold stock sentiment indicator.
Occasionallyan article captures your attention.
https://www.bloombergquint.com/onweb/banks-brace-for-big-bang-switch-on-80-trillion-worth-of-swaps
While I donot pretend to understand how the swaps market works, there are elements I havebeen following.
LIBOR wasthe basis for setting interest rates for interbank lending and derivativespricing.
This nowbeing replaced with a system that is apparently more reflective of reality.
Recall howbanks were found guilty of manipulating LIBOR and were fined?
ConsideringLIBOR was the platform on which mortgage interest rates are based, this affectssome serious quantities of loans.
Anyway thenew system will be in place this weekend and is expected to be relativelyseamless.
Somethingto look forward to next week.
The cynicin me in regards to the banking sector suggests that risk and price discoverywill be well and truly hidden with some new mirrors and an upgraded smokemachine.
The bankswould never agree to a system that does not work in their favour.
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POG and gold stocks are performing as expected and I expect the current holding pattern to continue.
Leading indicators are up at 50% (neutral).
The indicator looks very similar to January this year.
I will take a punt at what may happen if a stimulus package is delivered.
Gold will probably rise, markets go risk on and gold stocks sold down.
Then reality kicks in again.
Here is the indicator.
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