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Silver and the Yield Curve Inversion

Hubert Moolman
|
Monday, September 23rd

Yield curve inversions have historically been great for silver prices. Currently we are experiencing such a phenomena, and again it is evidence of conditions that are conducive to some impressive silver rallies.

Below, is a long-term chart showing the spread between the 10-year Treasure Note Yield and the 3-month Treasury Bill Rate.

I have chosen these two to show data for a long-term analysis. There appears to be a mega rounding top. The spread has just recently gone negative (inverted). There is a great likelihood that the spread could go lower, given the rounding top and a similarity to the 70s pattern (ABC).

Silver has already started to move, but what kind of rally can we expect going forward? Previously, I have argued that we are likely to see a rally similar to the late 70s .

Below, is a comparison of the above chart and a long-term silver chart to:

Notice how there were two deep negative spread dives in the 70s. As soon as those spreads went negative the first time during those inversions, silver started a massive rally.

As soon as the current inversion started, silver also started to rally. Will we have a shallow negative spread dive like the two recent ones, or will we see a deep and protracted negative spread dive like that of the 70s?

A deep dive like the 70s would be consistent with conditions ideal for a monster silver rally.

Warm regards

Hubert Moolman

For more of this kind of analysis, you are welcome to subscribe to my premium service. I have also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report.

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