Gold And Bitcoin Surge With Treasuries Hammered, What’s Going On? -

Gold And Bitcoin Surge With Treasuries Hammered, What’s Going On?

Oct 24, 2023Jeremy ParkinsonFinance0

Long-Dated US Treasuries Hammered TLT is the 20+ year duration US Treasury ETF. Chart courtesy of StockCharts.comTLT Weekly Technical Analysis

TLT is down almost 50 percent since early 2020.

Elliott Wave traced out five clean waves. This makes it an impulse wave not a correction. Wave three is usually the longest and strongest.

Wave fives can extend. So there is no clear technical reason to expect a bounce at this point but any bounce would tend to be a corrective bounce.

TLT Fundamentals

Deficits are soaring and there is no political will in Congress to change that.

The US is supporting two wars despite a huge basket of problems at home.

Budget infighting in Congress and Biden is requesting still more money.

The push for EVs is highly inflationary with questions about where minerals for batteries will come from.

The infrastructure is not remotely close to where it needs to be to support the EV revolution Biden wants.

Sentiment is sour and it should be. Attitudes are very much in play. A search for yield is now easy to find. People can get 5 percent on short-term treasuries so the prevailing attitude is not to go out on the curve with more risk.

No, it’s not China dumping. But China is buying less treasuries and agencies than before due to improved US trade deficits with China.

Gold and Bitcoin Daily Charts
Gold and Bitcoin daily charts courtesy of StockCharts.comGold and Bitcoin have roughly been tracing similar patterns.Gold finally seems to be reacting to the massive deficits and treasury issuance. The recent rise in yields also appears to be stagflationary, generally a very good time for gold.Bitcoin may be rising due to the same fundamentals. But it also appears to be reacting to SEC approval for a Bitcoin ETF.

The Grayscale Bitcoin Trust Arbitrage Play
On September 3, I discussed the Grayscale Bitcoin Trust (GBTC), its pending conversion to an ETF, and the arbitrage opportunity that still remains, with Gary Brode at Deep Knowledge Investing (DKI).GBTC was roughly 18.5 when I posted the play. It’s now 24.70, a gain of about 33 percent.For details, please see MishTalk TV with Gary Brode on the Grayscale Bitcoin TrustGary’s Deep Knowledge Investing Blog is free with the exception of subscriber only articles. His free articles present ideas, but when to sell articles are subscriber only.I am on the DKI board of advisors.You can check out DKI for $25 for your first month or for $100 for six months by using the coupon code Mish50 at checkout. Just so we have good clear communication, please be aware that subscriptions will renew at the regular rate. We still think it’s an excellent value, especially if you’re making money from our ideas, but you’ll have the opportunity to make that decision for yourself.While my focus is global macro, global politics, commodities, and recognizable large caps, the DKI space is much deeper into clear actionable ideas.DKI will appeal to readers who want a broader space and more actionable ideas. Here is the Deep Knowledge Investing Subscription Page. Please give DKI a look.

Gold Massive Cup ands Handle
Returning to gold one more time, it is flirting with a major breakout having undergone a huge three-year consolidation.If the next major move is higher, as I suspect, the move rates to be explosive.I am on the road this week, but if time permits, I may be able to do a Twitter Space discussion with Gary Brode on some of the ideas in this post.Relentless Treasury Selloff, It’s Not ChinaMeanwhile, there have been lots of charts and rumors circulation that the reason for Treasury weakness is China dumping US treasuries. Those stores are simply false.For discussion, please see Bond Bulls are Getting Crushed in a Relentless Selloff, It’s Not ChinaCompromise is always more spending for this in return for more spending on that.And both parties want to spend more on the military.Debt to GDP Alarm Bells Ring, Neither Party Will Solve ThisIn case you missed it, please see Debt to GDP Alarm Bells Ring, Neither Party Will Solve This“Neither party will fix the deficits. Neither party will do anything about mounting debt. No one will do anything about anything because the political system is totally broken.” MishThat’s also the message of the Treasury market and gold. Bitcoin advocates would say Bitcoin as well.More By This Author:BEA Reports GDP On Thursday, GDPNow Estimate Is A Hot 5.4 Percent
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