2/ On 1st Oct 2007, Gold broke out to ATH for the 1st time in 1.5 years
Thereon, the US unemployment rate began rising rapidly and economy growth slowed down
Which ended in the 2008 Financial Crisis pic.twitter.com/Ws5AjjTaz3
— Game of Trades (@GameofTrades_) April 10, 2024
4/ Today, Gold is once again breaking to new ATH pic.twitter.com/TiNHLHKttJ
— Game of Trades (@GameofTrades_) April 10, 2024
6/ Gold is inversely correlated to real interest rates
Falling gold prices suggest rising real interest rates and vice-versa
The current Gold breakout suggests investors anticipate a decline in real interest rates pic.twitter.com/Ld0pRG42eT
— Game of Trades (@GameofTrades_) April 10, 2024
8/ Gold's breakout suggests investors expect falling real interest rates
Implying a decline in US economic growth when adjusted for inflation
This could mean the economy is going to decline more than inflation, as in 2007
Or a steady economy with resurging inflation, as in the…
— Game of Trades (@GameofTrades_) April 10, 2024
10/ Commodities, including oil, gas, soybeans, wheat, and sugar, remain significantly higher than pre-pandemic levels in 2020
These elevated prices make meeting the Fed's 2% inflation target challenging pic.twitter.com/FtUg5pAUVZ
— Game of Trades (@GameofTrades_) April 10, 2024
12/ However, on a relative basis, default rates are still lower then pre-Financial Crisis
But the breakout in Gold is signaling that the economy is likely to continue weakening pic.twitter.com/fMRynTFOoK
— Game of Trades (@GameofTrades_) April 10, 2024
14/ Unfortunately, that would mean trouble for the economy or suggest that inflation is making a comeback
IF Gold comes back below this key level, that would mean a false breakout
And that would probably be bad news for gold, but great news for the economy pic.twitter.com/V3H2QFo2U8
— Game of Trades (@GameofTrades_) April 10, 2024
16/ Thanks for reading!
If you enjoyed this thread, please ❤️ and 🔁 the first tweet below
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— Game of Trades (@GameofTrades_) April 10, 2024