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Gold only broke out two months ago. For the most part it has been around 120 for over five years. And this is probably a consequence of all the trade issues as

Gold only broke out two months ago. For the most part it has been around 120 for over five years. And this is probably a consequence of all the trade issues as we get ready for less trade from tariffs. But the fed doesn't control long term rates (probably wish it did). The short end is heavily driven by technical factors including the overnight rate (even then that is only a target and it doesn't anyways follow what the fed wished it was). The long end isn't the same. It is driven by return on capital (higher returns both seek out loans and can afford to pay more for them). If there was long term mispricing we would see it in the tips market, and we don't. The research shows the opposite - been little arbitrage exists in the market and it is extremely well allocated.

gridlockd 7y ago
> Gold only broke out two months ago. The Fed only signaled a return to rate cuts two months ago. > But the fed doesn't control long term rates (probably wish it did). I never said they "control" long-term rates, but they greatly influence them, especially in terms of how low they can go. > The long end isn't the same. It is driven by return on capital (higher returns both seek out loans and can afford to pay more for them). Like this? https://m.privatewealth.usbank.com/pcrcp/images/articles/2016-01-13_06_return_pcr.jpg https://m.privatewealth.usbank.com/pcrcp/images/articles/201... > If there was long term mispricing we would see it in the tips market, and we don't. I don't see that. It takes quite a while for overvalued asset prices to make a dent in the CPI, by that time it's more likely that the bubble has popped.