News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Opening

10-Year Treasury Yields Spike Past 1.6%...Nasdaq Falls 3.5%...Silver and Gold Sell Off

February 26, 2021 - (Gold Market Wire) - A cascade of effects from a spike in the US 10-Year Treasury Bond market to 1.6% has sent equities, Gold and Silver lower.

No surprise really, its' all inter-connected and when liquidation time comes, those small, speculative market like Silver (especially) and Gold, get hit in the liquidation process. Right now, in the immediate, we await the New York opening to see if there is any follow through in the selling momentum Silver has support coming in at 26.50 (horizontal) and 26.10 (trend line).

the support picture.

The Gold sell-off was a much more muted affair - primarily because it has been grinding lower for days/weeks. Nonetheless, we touched down right on target.

the stuff of nightmares for Goldbugs...what a channel

Lastly, the vehicle we have been most interested in as of late -the Gold/Silver ratio, got the bounce we were looking for earlier this week. We saw the big support line as creating an impediment to working lower and exited the market on Tuesday.

https://www.goldmarketwire.com/articles/gold-silver-ratio-approaching-support

Our chart from Tuesday, where we exited the short ratio.

Right now, the Ratio is stuck in the Box created from 64 to 66. Scalpers can try their luck. The fact that its a 'diff' will neutralize some of the risk.

What now? Well, the damage has been metted out in Gold for some time, so there's not a lot to add to that awful looking chart other than the fact that the wild-eyes gamblers can try and spec long into the New York opening. Book adjustments mean we could get a bounce...but its only a spec trade. We'll keep looking for a place to short the g/s ratio again, but have to be careful. The reversal we identified might actually take hold now. Big picture, rising yields mean that the spectre of inflation may be slowly coming back, and that could (actually) be Gold's salvation... but not in the short term.

Perhaps most interesting of all (naturally) is that the rise in yields has stopped the sell-off in the US Dollar. We are back under 1.215. This may well be the most significant aspect of all the various facets of yesterday's move. If rising yields cause the Dollar to move higher, but also indicate a resurgent inflation, we may, in fact, start to see Gold and Dollar move higher together over the inter-mediate term. "Impossible!" they say. But we don't think so. Regular readers here know that we are increasingly skeptical of the "inverse correlation" of the Dollar and Gold.

As we have said for some time now, flat price Gold trading was going to be something to avoid - which is why we positioned on the ratio. With that now bottoming out in the short-term, there really is no other position than the sidelines.

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