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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (31976)	10/31/1999 2:06:00 PM
From: TimbaBear	Respond to of 99985

Lee....I think Gold disconnected from being an inflation hedge a while ago, and it's current flurry of activity has been due to different reasons (i.e. being over-hedged when Central Banks said they would have a measured sell-off over 5 years instead of dumping supply at random), the big rally was IMO just a short covering rally and now Gold is finding it's new level. The TYX is falling because it was climbing the wall of worry that inflation was getting out of control and the Fed was behind the curve....once the ECI numbers showed modest (instead of runaway) wage pressures and a GDP that was as strong as expected and that the Fed wasn't behind the curve, a lot of the nervous hedging began to be undone....I expect long bond yields not to drop below 6.00 based on current economic conditions....we may see a drop below that if the long bond is used as a Y2K hedge, but if so, that will be a short term drop.