{"id":25943,"date":"2021-05-22T03:59:03","date_gmt":"2021-05-22T03:59:03","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=25943"},"modified":"2021-05-22T04:16:40","modified_gmt":"2021-05-22T04:16:40","slug":"gold-breaks-1850-per-ounce","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2021\/05\/22\/gold-breaks-1850-per-ounce\/","title":{"rendered":"Gold breaks $1850 per ounce"},"content":{"rendered":"<p>10-Year Treasury yields remain soft despite the recent CPI spike. The Fed is weighting purchases more to the long end of the yield curve. Breakout above 1.75% (green line) would signal a fresh advance.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2021\/2021-05-21-tnx.png?w=525&#038;ssl=1\" alt=\"10-Year Treasury Yield\" \/><\/p>\n<p>10-Year TIPS yield sits at -0.78%, unaffected by the $369bn in overnight Fed reverse repurchase agreements which remove liquidity but mainly affect short-term interest rates.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2021\/2021-05-21-tips-rrp.png?w=525&#038;ssl=1\" alt=\"10-Year TIPS Yield &amp; Fed RRP\" \/><\/p>\n<p>Gold broke through resistance at $1850\/ounce. A rising Trend Index indicates medium-term buying pressure. Long tails on the last three daily candles indicate retracement to test the new support level; respect signals a test of $1950\/ounce.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2021\/2021-05-21-gold.png?w=525&#038;ssl=1\" alt=\"Spot Gold\" \/><\/p>\n<p>Silver is testing resistance at $28\/ounce. Rising Trend Index indicates medium-term buying pressure. Breakout above $28 is likely and would offer a target of $30\/ounce in the short\/medium-term.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2021\/2021-05-21-silver.png?w=525&#038;ssl=1\" alt=\"Spot Silver\" \/><\/p>\n<p>The Dollar index is testing primary support between 89 and 90. Rising Trend Index (below zero) suggests another test of the descending trendline. Respect is likely and breach of primary support would offer a medium\/long-term target of 85<sup>1<\/sup>.<br \/>\n<img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2021\/2021-05-21-dxy.png?w=525&#038;ssl=1\" alt=\"Dollar Index\" \/><\/p>\n<p>From Luke Gromen at <a href=\"https:\/\/www.fftt-llc.com\/\">FFTT<\/a>:<\/p>\n<blockquote><p>When you are an externally-financed twin deficit nation with insufficient external funding (as Druckenmiller pointed out), there are three potential release valves:<\/p>\n<ol>\n<li>Higher unemployment.<\/li>\n<li>Higher interest rates.<\/li>\n<li>Lower currency (inflation.)<\/li>\n<\/ol>\n<p>With US debt\/GDP at 130%, Options #1 and #2 aren\u2019t an option&#8230;&#8230;<\/p><\/blockquote>\n<h2>Conclusion<\/h2>\n<p>We expect long-term Treasury yields to remain low while inflation rises, causing the US Dollar to sink and Gold and Silver to advance.<\/p>\n<p>Our long-term target for Gold of $3,000 per troy ounce<sup>2<\/sup>.<\/p>\n<h4>Notes<\/h4>\n<ol>\n<li>Dollar Index (DXY) target of 85 is calculated as the peak of 93 extended below support at 89.<\/li>\n<li><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2021\/05\/15\/gold-our-long-term-target\/\">Gold LT target calculation<\/a>: base price of $1840\/ounce + [TIPS yield of -0.87% &#8211; (nominal Treasury yield of 1.64% &#8211; real inflation rate of 5.30%)] * $400\/ounce = $2956\/ounce<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>10-Year Treasury yields remain soft despite the recent CPI spike. The Fed is weighting purchases more to the long end of the yield curve. Breakout above 1.75% (green line) would signal a fresh advance. 10-Year TIPS yield sits at -0.78%, unaffected by the $369bn in overnight Fed reverse repurchase agreements which remove liquidity but mainly &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2021\/05\/22\/gold-breaks-1850-per-ounce\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Gold breaks $1850 per ounce&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31,9,13,35],"tags":[4238,69,1073,4889,3204,3206],"class_list":["post-25943","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","category-gold-precious-metals","category-inflation-economy","category-us-dollar-index","tag-10-year-tips-yield","tag-10-year-treasury-yield","tag-dollar-index","tag-fed-rrp","tag-spot-gold","tag-spot-silver"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Gold breaks $1850 per ounce - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gold breaks $1850 per ounce - the patient investor\" \/>\n<meta property=\"og:description\" content=\"10-Year Treasury yields remain soft despite the recent CPI spike. The Fed is weighting purchases more to the long end of the yield curve. 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He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters. Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis. Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008\/2009 and 2020 bear markets well ahead of actual events. He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.","sameAs":["https:\/\/facebook.com\/people\/The-Patient-Investor\/61572934660810\/","https:\/\/www.instagram.com\/colin_thepatientinvestor","https:\/\/au.linkedin.com\/in\/colintwiggs"],"url":"https:\/\/thepatientinvestor.com\/index.php\/author\/investor\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9tQ4n-6Kr","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":25821,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/05\/15\/gold-our-long-term-target\/","url_meta":{"origin":25943,"position":0},"title":"Gold: Our long-term target","author":"Colin Twiggs","date":"May 15, 2021","format":false,"excerpt":"10-Year Treasury yields eased to 1.635% on Friday, while the break-even inflation rate steadied at 2.51%, reflecting a real yield of -0.87% (more on this later). Negative real interest rates are a strong influence on the Gold price. Investor demand for Gold as a store of value rises, the further\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":22069,"url":"https:\/\/thepatientinvestor.com\/index.php\/2020\/10\/17\/a-short-note-on-gold\/","url_meta":{"origin":25943,"position":1},"title":"A short note on Gold","author":"Colin Twiggs","date":"October 17, 2020","format":false,"excerpt":"The 10-year TIPS yield fell to -0.95% on Thursday. We expect the Fed to maintain negative real interest rates for several years, which would boost investor demand for Gold. The Fed has to keep buying Treasuries to support the massive federal deficit and to reduce the cost to Treasury of\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":24635,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/03\/20\/gold-and-another-treasury-sequel\/","url_meta":{"origin":25943,"position":2},"title":"Gold and another Treasury sequel","author":"Colin Twiggs","date":"March 20, 2021","format":false,"excerpt":"Long-term Treasury yields are strengthening, with the 10-year reaching 1.73% on Friday. The real yield shrank to -0.58% (1.73 - 2.31), breaking resistance at -0.60%. Long-term yields may be rallying but the primary trend is downward. Fed asset purchases are accelerating. The Dollar Index is testing resistance at 92. Rising\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":23548,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/01\/06\/gold-and-silver-break-resistance\/","url_meta":{"origin":25943,"position":3},"title":"Gold and Silver break resistance","author":"Colin Twiggs","date":"January 6, 2021","format":false,"excerpt":"The 10-Year TIPS yield fell to -1.08% on January 4th, testing recent support. Breach of support would indicate another decline in real Treasury yields. The Dollar Index continues its downward slide. Breach of primary support, between 88.5 and 89, would offer a long-term target of 80 (the peak of 100\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":36000,"url":"https:\/\/thepatientinvestor.com\/index.php\/2022\/07\/30\/gold-silver-bullish-divergences\/","url_meta":{"origin":25943,"position":4},"title":"Gold &#038; silver bullish divergences","author":"Colin Twiggs","date":"July 30, 2022","format":false,"excerpt":"Long-term Treasury yields are falling, despite Wednesday's 75 basis point hike in the Fed funds rate, with the 10-year yield falling to 2.68% on Friday. The yield curve has not only flattened -- with 2-Year to 30-Year maturities converging in a narrow band -- but is now declining, anticipating an\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"10-Year Treasury Yield","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-07-30-10y.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-07-30-10y.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-07-30-10y.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":23790,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/01\/22\/gold-silver-boosted-by-the-fed\/","url_meta":{"origin":25943,"position":5},"title":"Gold &#038; Silver boosted by the Fed","author":"Colin Twiggs","date":"January 22, 2021","format":false,"excerpt":"The 10-Year TIPS yield declined to -1.02% on Wednesday, responding to a rise in Fed purchases. Breach of support at -1.08% would signal another LT decline in real Treasury yields. The Dollar Index found short-term support at 89\/90 but continues in a primary down-trend. Further weakness in real Treasury yields\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/25943","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=25943"}],"version-history":[{"count":4,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/25943\/revisions"}],"predecessor-version":[{"id":25947,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/25943\/revisions\/25947"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=25943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=25943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=25943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}