In many of my early postings I repeatedly told that whenever tension arises in market, investments are shifting towards so called safe heavens. Precious metals also qualify for these safe heaven, then it is quite difficult to understand why these are not performing during last few weeks, considering the fact that Gold was in little over-bought zone ?
Now if we look on to Treasuries during last few weeks then we can see that it performed quite well, as we know that their Yields are dropping much during this time. Now this question must come that whether investments are shifting from Gold & Silver to Treasuries ?
May be ! Because if we think about US dollar here then we know, that during some weeks dollar is going against the trend it followed during this year. So there we may have some answer. But what about Gold and Silver ?
In my weekly review, in few days ago I told that some more corrections are due in both Gold and Silver, as it look like in the charts. So that means, will they come into those levels, where they were in the beginning of the year 2011 ? I don’t know for sure. But it is sure that some corrections are due, also considering the recent relation between US dollar and Treasuries. Then how long these movements in Treasuries will go !
Here one question comes in my mind that whether Treasury markets were discounting QE-3 ! Now if we forget that and think only about US dollar then it is sure that, this movement in USD is not for long, at least where the aim of the authorities is to keep Dollar low.
NOTE : Please see the disclaimer of this blog .