"SAFE HAVEN INVESTMENTS" are following a similar pattern of having a 10% rally after a long 25%+ slide.... Gold First, Then Bonds. Both markets washed out at the end of 2013. After a first quarter bounce, gold resumed its decline, but bonds have kept going and reached the seemingly magic 10% rally level (on 20 year TLT, which doesn't factor in dividends paid along the way).
The percentage declines are similar (both greater than 25%) prior to the bottom and the rally of 10% is the same so far. The only difference this time is we are seeing a sharp drop in Gold relative to Bonds and it is setting up a spread. At some point gold becomes a buy, relative to bonds.
Let's see if we can nail when Gold will outperform TLT.
Tim 3:00PM EST, TLT 111.48 last, GLD 119.76 last. June 4, 2014
Comments
timwest
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Gold outperformed TLT after this chart : Note the 7% advance in the 19-days after.
timwest
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Gold outperformed TLT nicely after this :
mika2k1
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Seems speculative money thinks gold will perk up soon:
Frank_D
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Hi timwest, could the spread revert with TLT falling to catch "down" to gold? In relative terms gold would be less of a sell than bonds…
timwest
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Gold did make a run up versus bonds (TLT) after this chart
... then has faded back down.