Here’s The Key To Gold’s Next $100 Move
Tommy Humphreys | Feb 23, 2015 04:30PM ET
The yield on the 10-year U.S. Treasury note has surged 50 basis points in the past few weeks and in turn gold has fallen nearly $100/oz. The negative correlation between yields and gold has been strong for the last 6 years and this correlation has become even stronger in recent weeks.
Since the 2008-2009 Global Financial Crisis, gold has held a strong inverse correlation to real 10-year yields .
Recently, the negative correlation between gold and 10-year yields has reached 90%. (bottom of chart below.)
Given the strong correlation between 10-year yields and gold, there are a couple of key yield levels to watch in the 10-year note over the coming weeks.
The recent rally in yields stopped at a logical area of resistance (~2.15%). A breakout above 2.15% would have negative implications for gold, whereas a decline back below the 2.00% yield area should set in motion the next leg higher in gold.
Via Energy and Gold.com
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