[Intermarket, Weekly] Dollar, Gold, Interest Rates
Let's update last week's chart, and take a look at the big picture of the Dollar, gold and interest rates.
The pink arrow points to the yield of the 30-year Treasury Bond, and as of last week, it hit the upside target, which was a test of the upper edge of the triangle in the 5.3% area.
It was only a month ago that everyone was clamoring for the Fed to lower rates to help stimulate the market. With the market doing the reverse, it's hard to imagine how the Fed will be able to do this, whether lower rates are needed or not. Would love to be a fly on the wall at next Tuesday's FOMC meeting.
Observers should be split into two camps when it comes to the bond crash that drove interest rates up. One side must be thinking that the Fed's alledged attempt to articifially hold rates down a la Japan produced a bond bubble that burst and all hell is about to break loose on the downside for the U.S. The other side must be thinking that the worse is over for the economy, and that rising rates simply confirm.
Gold failed to break out on test of the upper edge of the big triangle. That was no surprise.
The surprise is in the Dollar, of course. Higher rates attract capital to the beaten up buck.
03.08.04 07:20 #