Depending on the length of time you have been watching markets, you will find that you have a bias towards thinking that gold and interest rates (as measured by US Gov't T-Bill Rates) have some kind of a pattern.
But the longer term chart reveals that there is almost zero correlation. I wont even run the "correlation indicator" because you can very easily see that they have nothing in common.
What can we see here instead? That Gold went up a tremendous amount and is consolidating that gain. AND we can see that rates rise into the range of the previous advance and then turn back down. That's about it.
My next chart will be T-Bill Rates adjusted for inflation and tax rates, but it isn't an easy graph to make.
What does it show now? That rates are still very low and you earn nothing on an inflation-adjusted basis. If you want to earn a return, you have to take some calculated risks and invest in something.
im sorry this doesnt make sense given that the floor on t-bill has happened during so much gold volitility hows that a relationship?
timwest
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@josephsmith, I don't think I understand your question. When you say "This doesn't make sense"? What "this" do you mean? What I am saying is that Interest rates and gold don't correlate. If I told you the future interest rates, the concept would follow that you wouldn't be able to figure out where gold would be. Generally speaking when you have two markets that correlate you can make conclusions from one when you have the information about the other. Gold is fascinating that way.
TheGrandestOfAllGrandMasters
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@timwest, ok i understand better now i was mistaken thank you for your reply :)