The charts that matter: more pain for goldbugs

Gold investors saw more disappointment this week as the yellow metal took a tumble. Here’s what’s happened to the charts that matter most to the global economy.

Welcome back. 

In this week’s magazine, we look at the country’s – indeed much of the developed world’s – labour shortage and what it means. As Philip Pilkington argues, chronic labour shortages caused by people’s fears of returning to work and hesitancy in getting vaccinated means rising wages - and that in turn could mean spiralling inflation. We’ve seen this sort of thing before, he says – in the 1970s. “The dynamics this time are different”, he says, but “investors should beware”. He explains the best ways to protect your portfolio – if you’re not already a subscriber, sign up here and get your first six issues free

This week’s “Too Embarrassed To Ask” video explains what a marginal tax rate is. A surprising number of people are flummoxed by this apparently simple concept. Find out exactly what it means here

And in this week’s podcast, Merryn’s joined by Kieran Heinman, author of Playing The Market: Retail Investment And Speculation In 20th Century Britain. Listen to the episode here.

Here are the links for this week’s editions of Money Morning and other web articles you may have missed:

Now for the charts of the week. 

The charts that matter 

Gold saw a big fall as US economic data came in stronger than expected (if markets think that rates will go up sooner as a result of stronger economic data, then all else being equal, that’s not good for gold).

Gold price chart

Gold price chart

(Gold: three months)

The US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) edged higher.

US dollar index chart

US dollar index chart

(DXY: three months)

The Chinese yuan (or renminbi) looked to be gaining strength (when the red line is rising, the dollar is strengthening while the yuan is weakening). 

USD/CNY currency chart

USD/CNY currency chart

(Chinese yuan to the US dollar: since 25 Jun 2019)

The yield on the ten-year US government bond changed little this week. 

US Treasury bond yield chart

US Treasury bond yield chart

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond recovered after an earlier slip.

Japanese government bond yield chart

Japanese government bond yield chart

(Ten-year Japanese government bond yield: three months)

And the yield on the ten-year German Bund continued its gradual rise.

German Bund yield chart

German Bund yield chart

(Ten-year Bund yield: three months)

Copper saw very little action – climbing a little only to fall back. 

Copper price chart

Copper price chart

(Copper: nine months)

The closely-related Aussie dollar fell back.

AUD/USD currency chart

AUD/USD currency chart

(Aussie dollar vs US dollar exchange rate: three months)

Bitcoin recovered somewhat from last week’s big fall.

Bitcoin price chart

Bitcoin price chart

(Bitcoin: three months)

US weekly initial jobless claims rose by 20,000 to 332,000. The four-week moving average fell by 4,250 to 335,750. 

US initial weekly jobless claims chart

US initial weekly jobless claims chart

(US initial jobless claims, four-week moving average: since Jan 2020)

The oil price headed back over $75 a barrel.

Brent crude oil price chart

Brent crude oil price chart

(Brent crude oil: three months)

Amazon fell a little further, despite a rally towards the end of the week.

Amazon share price chart

Amazon share price chart

(Amazon: three months)

Tesla looked to be heading for a fall, then regained most of its losses.

Tesla share price chart

Tesla share price chart

(Tesla: three months)

Have a great weekend.

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