Chinese Lunar New Year Ended, Gold Demand Down?

… Absolutely not!

People say that when the Chinese New Year ends (31 January), gold demand would come down.

What do we see two weeks after Chinese New Year? A record amount of Chinese gold demand at 64 tonnes a week, that’s 256 tonnes a month, above global mine supply.

SGE Withdrawals (In Gold We Trust: Koos Jansen)

I believe we could see an increase in gold demand when the price of gold rises. It seems counterintuitive, but the gold demand curve is not straight, it is curved (red graph below).

We might see it happening right now.

Money Velocity Vs. Bond Yield

This page is created to monitor the Money Zero Maturity Velocity (MZM velocity) Vs. 10 Year U.S. Treasuries.

Historically, both are correlated. If money velocity picks up (blue chart), 10 Year U.S. Treasury Yields will rise (red chart).

Correlation: 30 Yr. Treasury Yield Vs. 30 Yr. Mortgage Rates

Just wanted to add another couple of correlations to my collection. We will learn about fixed and adjustable rate mortgages. These are correlated against treasury yields and fed funds rate respectively.

1) Conventional (Fixed) Mortgage Rate Vs. Treasury Yields

As you can see mortgage rates are always higher than treasury yields because U.S. treasuries are considered much safer than mortgages.

Chart 1: 30 Yr. Treasury Yield Vs. 30 Yr. Mortgage Rate

2) Adjustable Mortgage Rate Vs. Fed Funds Rate
Adjustable Rate Mortgages on the other hand are linked to the Fed Funds Rate.

Chart 2: 1 Yr. Adjustable Rate Mortgage Vs. Fed Funds Rate

An analysis of MZM Velocity and 10 Year US Bond Yields

I recently discovered (autodidacticly) that MZM velocity correlates well with 10 Year US Bond Yields. To see the analysis go to: Treasuries are a bad deal