~*~Mining and Metals Du Jour~*~

[ConferredDiligence]

Great article eik, It's all about correlations, they may disappear for awhile due to constant intervention but, they always come home to roost and this next one will be a doozy.

Interestingly, the 10 year yields have already started declining recently along with the US dollar as some of the steam comes out of the "Buy America" trade. Usually the dollar and yields move inversely, but this has been one giant correlated trade post elections. As the USD is sold, the 10 years get bought and as the 10 years get bought, the yields fall. As the yields fall, the shorts on the treasuries get squeezed and as the shorts in treasuries get squeezed, yields fall further. When yields decline, real rates decline (because inflation has remained relatively constant in the past two months). When real rates decline, gold goes higher. For this reason, the short interest in the treasuries is THE chart to watch if you are interested in determining the price action in gold going forward.