Gerardo Del Real,
Editor
Aug. 5, 2021
For years I’ve explained the correlation between the 10-year bond yield here in the U.S. and the gold price.
It’s been a relatively simple correlation. Yields go down, gold goes up... and vice versa.
While the nearly year-long consolidation (base building) in the gold price has been frustrating for most, there are signs everywhere that the consolidation may be nearing its end.
If $1,800 is the new floor for gold, the next few years are going to make the past 11 months well worth the wait.
The U.S. 10-year Bond Yield just hit its lowest level in five months.
The five-year inflation-adjusted rate hit a record low on Wednesday.
But capital isn’t just looking for a safe home here in the U.S.
In Germany, 30-year borrowing costs fell below 0% on Monday.
The 10-year in Germany recently closed at -0.48%.
The entire yield curve in Germany is now in negative territory for the first time since, you guessed it, six months ago.
Real German 10-year bond yields are now at a record low of -1.878%. Hard to make that up with volume.
Elsewhere, Japan’s 10-year rate is at zero. Italy’s two-year yield is below -0.5%.
The combined “worth” of the world’s negative-yielding debt is now just over $16.5 trillion. It was $12 trillion in mid-May.
Delta? Labor shortages? Supply chain bottlenecks?
The reason isn’t as important as what happens next.
What I believe happens next is a sideways move in gold for the next few weeks and then a robust September that leads to new all-time highs by year-end.
Predictions have a way of making fools of those that deliver them.
However, even if I’m wrong — even if gold never goes up another dollar — there are a handful of companies adding value every day that the market is ignoring.
It’s value that I’m taking advantage of.
And it’s value that I suspect will be unlocked in very profitable fashion.
Soon.
Let's get it!
Gerardo Del Real
Editor, Daily Profit Cycle
For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Daily Profit Cycle, Junior Resource Monthly, and Junior Resource Trader. For more about Gerardo, check out his editor page.
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