Real Estate: More Sellers Than Buyers

Home prices won't rise much.

Silver Miners Vs. Gold Miners

Gold miners are cheaper than silver miners.

Higher Deficits

Deficit projections have risen. 

Mortgage Rates To Rise

Only fools buy mortgage backed securities. 

CME Bond Margin Requirements Vs. Gold

When the price of precious metals go up, the CME tends to hike margins.

 

The Fundamental Price of Gold

The fundamental price of gold is calculated using these parameters.

1) NTFS (path of rates) 

2) Exchange rate 

3) Real yield 

4) COT positioning 

5) Futures curve (cobasis)

1) NTFS: Near Term Forward Spread

The likelihood of a rate cut in the future increases the fundamental price of gold.

2) Exchange rate

The stronger the USD, the higher the fundamental price of gold. This is because a strong USD will eventually need to go back to its fair value (lower) and that will push up gold higher.

3) Real yields

The fundamental price of gold is high, when we are in a period of positive real yields. This is because the gold price will rise when we go from positive real yield to negative real yield.

4) COT positioning

Speculative long positioning as % of open interest.
When longs are out of the market, that means the fundamental price of gold is high. This is because gold will rise when the longs start to enter the market again.

5) Futures curve (cobasis)

Fundamental Price ≈ Spot Price × (1 + Risk-Free Rate - Gold Yield)

Gold yield = Cobasis = (Spot Bid Price - Futures Ask Price) / Futures Ask Price

The steeper the gold futures curve, the higher the fundamental price of gold.

Rio Reset

The Rio Reset from BRICS Summit on 6-7 July will be pivotal to gold.

Economic Policy Uncertainty Index Vs. Gold

The Economic Policy Uncertainty Index EPU is correlated to gold deliveries and gold price.

https://www.policyuncertainty.com/

Leading Index Down

Stocks are living in fantasy land. 

Ray Dalio Buys Gold

Bridgewater is buying GLD. 

Asia Gold ETF Buying

Asia is an emerging gold ETF buyer. 

Gold Flowing Into US Stock Market

Gold is waiting for the US stock inflows to end.

Fund Managers' Gold Take

According to fund managers, gold should correct to $2700.

Tariff Trade War De-escalation

USA - China lowered tariffs. 

Import Jobs: Easy Come, Easy Go

Imports created jobs. Easy come, easy go.

IEA Oil Supply and Demand

Oil is going to drop hard.