Real Rates and Gold Another way to look at Real Rates is by looking at the difference between TIP (Treasury Inflation-Protected securities) and SHY (1-3 years Bond Yield). When the diff. is positive you have Inflation and as you probably know, gold likes inflation. Looking at TIP-SHY compare to Gold, each time we have divergence, gold wins … :).
Tip and Gold Short. Tip sold to day and we are over extended just like gold think we will now start to head down as gold will drop with TIP I now think that we might get a interest rate hike witch will help banks next week and gold will fall out of the skys. Gold is in green look how they work together.
TIP lost another dollar and change this month (so far), 10 month MA is pointing downward. RSI broke trend and MACD is negative. So Fed can raise rate at this point? I do not think so. Also no point for Fed to raise rate at a time when commodities are crashing, and China is floating their currency down. I expect more unwinding of rate hike expectation, and thus ...
TIP started June with a bearish tone with support broken (tentatively). Note the serial lower highs since last October and downward pointing 10 month MA. RSI is weakening with broken support and MACD is turning negative (so far). With this backdrop I highly doubt the Fed will raise rate any time soon, as that makes no sense.