Fundamental Trading

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quote Some Information on Bonds There are two types of bonds. Corporate and Government. We care about bonds. When interest rates rise, the price of government bonds return, which means their yields go up (investors receive a better return for buying the bonds). When interest rates drop, the price of the government bonds go up, the yield goes down. For the ones who don't know the yield is the coupon sum divided by the price of the bond. Better returns mean more investors, such as big pension fund managers, and investors, in general, will...

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I've read about this earlier, but I certainly feel like I'm learning it for the first time. Thanks for your English explanation.

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Originally Posted by ;

quote Some Advice on Bonds There are two kinds of bonds. Corporate and Government. We care about bonds. When interest rates rise, the price of government bonds go down, and that means their yields go up (investors get a better return for buying the bonds). When interest rates fall, the price of the government bonds go up, the return goes down. For those who don't know the return is the voucher amount divided by the price of the bond. Better returns imply more investors, like large pension fund managers, and investors, in general, will...

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Chief,

As usual a Gem of a post...https://www.forexforum.co.za/attachments/1524780592.jpg

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Originally Posted by ;

quote Some Information on Bonds There are two kinds of bonds. Corporate and Government. We care about bonds. When interest rates rise, the price of government bonds go down, which means their yields move up (investors get a much better return for buying the bonds). When interest rates fall, the price of the government bonds go up, the yield goes down. For the ones that don't know the yield is the voucher sum divided by the price of the bond. Better yields imply more investors, like large pension fund managers, and investors, generally speaking, will...

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Chief,

This is exactly what I understand: Please correct where you see fit

a. Price of a Bond and Bond Yield have inverse Relationship: When price of a bond goes up; Yield goes...

b. Interest Rates and Bond Yield go in Tandem.


1. As an Example, If we consider that the US 30 Year T-Bond:

https://www.investing.com/rates-bond...treaming-chart

Hypothetically we deduce Either Via TA, FA or any other Method which the Price of US-30 Year T-Bond is headed down .

So that the yield of US 30 Year T-Bond should go up that will also indie that the Interest Rate of USA will also go up?

My query is based on the price of the Bonds can you predict the Interest Rate changes which are going to occur?


2. You Mentioned:

Here is how demand for bonds, will boost demand for a currency.

To Evaluate the Demand for a Bond, do we Examine the Bond Price or Bond Yield?

Typically a Higher Price for X Entity will indie Increased demand.

But higher bond price means lower yield which is the rate of recurrence, a very low return means less need.

I'm confused as to which to look at?


Due

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Originally Posted by ;

Welcome to the MENTAL Trading.

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k

I want understand how can us inflation affect the gold prices at what rate?

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Originally Posted by ;

I want know how does us inflation affect the gold prices at what rate?

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Gold games inflation. Gold return is a lot higher than the US inflation rate but that is because the US and the major Central banks changed the way they compute inflation to mask each year, how much of their citizens wealth is being destroyed. From the US this specifically happened when Bill Clinton was still president.

Gold includes a true turn average of approximately 10% a year since they changed how inflation is calculated. Should you use the older method to calculate the US's inflation rate, you will see it is actually fitting the return of gold.

Should you look back 100 years and compare infation rate together with the return of gold, you will say they basically match. It's only since the world began hiding true inflation using a new forumula they've deviated from one another.

What I understand is that the us dollar strength has a direct connection to gold prices, I have been using us inflation to track gold prices from January this year and inflation has been at 2.7 and moved down to 2.4 at April but gold just started to move down at 17th April from 1292 to 1216 this month, including to this impact gold was on the rise until it reached the high of 1292 by the onset of this year despite inflation falling. Is inflation a alyst for transferring gold prices?

Gold is different I would like to use us macro economics to forecast gold prices, is this possible and if so which facets should be tracked to demone this?


https://www.forexforum.co.za/attachm...1987050086.jpg

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quote 1. No, definitely not. You have to look at the larger picture of what and understand how an event will affect the market be it bad or good. Like using the AUD release, you go see what the Central Bank says about employment, you then go and see exactly what the analysts say the news will be. Do they think it will get better or worse? We had two employment and the CB said they desired to see it get much better. This means, if the numbers are away, we since the bank are far off course, which will frighten investors, if the amounts are...

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Chief,

Upon rereading this post, I have a query.

You said:

This means we'll eventually become a scenario in which the RBA reductions rate, diminishing the supply of the currency and the Fed hikes rates, raising their supply.

What I understand:

A Central Bank cuts rate once it wants to grow the inflation that signifies an increase the supply of currency and hiking rates signifies decrease inflation that means decrease in supply of currency.


Thus, does cutting rates increase or reduce the supply of currency?

Thanks

US business cycle is currently in early up cycle Fed will hike rate in next couple decades. Yield of US bonds will grow as industry cycle rise.
Thus, US dollar will rise if trump doesn't intervene.

US boost, then, China will boost. Then, commodity boost. Thus, RBA will hike rate.

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quote Chief, Upon rereading this post, I have a query. That being said: This means we will move into a scenario where the RBA cuts rate, decreasing the supply of the currency and the Fed hikes rates, increasing their supply. What I know: A Central Bank cuts rate when it wants to increase the inflation which means an increase the supply of currency and trekking rates means decrease inflation which means reduction in distribution of currency. So, does cutting rates rise or reduce the distribution of currency? Thanks

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You have to to remember the rates are significant. If the rate is large, it means it costs money for individuals and business and banks to invest money. This slows growth in the market as individuals have less access to cheap money, which slows inflation because inflation is caused by increase along with also the printing of money. When rates are high and money becomes more costly to borrow, there is less in the market as it is just better to maintain the currency instead of spending it. So as rates are rising and will continue to do this individuals are going to want to buy the currency and to buy bonds and invest as this is when the market is in expansion(which is why rates are rising), but after rates peak and the market peaks, folks will be watching to another cycle to begin and to get rates to be cut as growth and inflation slow too much because of the way large rates have gotten.

Rates being low means money is inexpensive to borrow so folks wish to get money and spend it, they don't wish to hold onto it. This spending triggers growth and inflation to grow. We have been in a hard core recession the past couple of years after you factor in the true inflation numbers, which is why rates here and across the world are at 300 year highs and in some countries they are going. This because banks need people to gain access to kick start the market.

But as Jack stated, we are are beginning to move from the base of the economic cycle back into the expansion period where rates will probably continue to rise out the expansion to prevent growth and inflation from going out of control as the market expands.

Its not too much about where the rates are that causes supply and demand to change, it is where the market thinks they're going next. And this impacts growth and inflation since remember, the leading indiors are of the coincident indiors, and such indiors are 6-12 months before their lagging indiors.