Yields Squeezing, Dollar Running, and What It Means for Gold

If you look at the charts right now, a major technical and macroeconomic setup is unfolding across Treasury Yields, the US Dollar Index DXY, and Gold.

1. Weekly Squeeze on 10 Year Yields
The weekly chart for TNX shows price action is coiling tightly into the apex of a multi year pennant pattern. The moving averages (red and green lines) are stacked underneath price, curling upward, and providing dynamic support. At the same time, weekly momentum indicators like the TTM Squeeze are turning green. Everything points toward a potential upside breakout sooner rather than later.

2. Monthly Structural Floor
Zooming out to the monthly 10 Year Yield chart, we see that yields are respecting a long term upward trendline that started in 202 after the 2020 lows. Every time yields pull back to key support levels, buyers step in aggressively. Long term interest rates have established a clear higher floor.

3. Triple Threat: Yields, Dollar, and Paper Gold
When 10 Year Yields and the 2 Year Yield rise together, they pull the US Dollar Index up with them. This creates a short term liquidity crunch for precious metals.
Opportunity Cost: Treasury yields offer a guaranteed return. When nominal rates rise, traders dump non yielding paper Gold futures to grab paper yield.
Technical Pressure: On daily charts, this dollar and yield push keeps Gold trapped inside a downward sloping channel heading toward key support near $4k.

4. Macro Picture: Running Dollar vs Real Inflation
Why are yields staying high? Because real world inflation is sticky. Official government numbers use formulas like substitution and quality adjustments that smooth out true cost of living increases. But everyday essentials like food, insurance, utilities, and housing have increased significantly over the last few years.

While a surging Dollar and rising yields push paper Gold down in the short term, they also signal growing national debt burdens and loss of cash purchasing power. Over a longer horizon, short term paper pressure gives way to physical demand, and hard assets eventually decouple from dollar strength.

Conclusion:
Respect the short term daily trend while DXY and yields push higher, but keep your eye on the bigger macro picture as structural inflation remains real.