Key Macro Charts: Will gold face a roller coaster market? (2024/10/15)
This issue of "Macro Must-See Charts" analyzes the correlation between US bond yields and the US dollar, pointing out that the decline in short-term yields may have a significant impact on the dollar. Gold extraction volume rebounded in September, expecting a wave of increase, but caution is needed against price pullback risks. Analysts believe that the price of gold is already far above the 200-week moving average, and may face long-term consolidation or a sharp pullback to $2450 in the future
US Treasury Yield vs. US Dollar
The shift in US Treasury yields is crucial for the next move of the US Dollar index. In the chart below, we can see the almost perfect correlation between the two.
Shift in US Treasury Yields
Analyst: We are currently in a phase where many macro assets have clearly over-expanded and may see a trend reversal - the US Dollar and 2-year US Treasury yields are typical examples.
Short-term yields experienced a sharp decline from May to September, followed by a rapid rise in the past two weeks, reaching significantly overbought levels. I believe this trend is unsustainable, with the 2-year US Treasury yield significantly higher compared to historical support levels.
Therefore, the decline in short-term yields may have a significant impact on the US Dollar, especially considering the overbought state of the US Dollar index, with the RSI approaching the overbought level of 80.
Gold Fundamentals
In September, the Shanghai Gold Exchange (SGE) saw a continued increase in gold withdrawals, rising by 13% to 115 tons. This growth is mainly attributed to seasonal restocking by retailers before the National Day holiday in early October and the upcoming peak demand for gold in the fourth quarter.
Gold Price Forecast
Analyst: I believe gold will experience a wave of upward movement next, but investors need to control their emotions because as shown in the chart, the price is already well above the 200-week moving average. Once the rebound ends (around $2800-2900?), gold will face a long period of sideways consolidation or a sharp pullback to around $2450.
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