Silver2012
New Member
Based on the historic relationship between gold and interest rates, analysts have concluded that fluctuations in the 10 year Treasury yield are useful for predicting gold's next moves. As a result, it has been recently determined that if the 10-year Treasury yield rises to 5%, gold will fall to $471 an ounce. Assuming that the past is an accurate predictor of future economic correlation, a 1% decline in the Treasury yield is required for a significant increase in gold back above 1,900. In order to validate the theory of this correlation between gold and interest rates, analysts must include additional variables to their current statistical investigation and not solely rely on the highly correlated model.
[youtube]http://www.youtube.com/watch?v=xGsnQcEAOuM[/youtube]
But Claude Erb, the man behind this comprehensive model of gold, defends his findings by arguing that the public must not firmly reject these conclusions based on high predictive power (i.e. a r-squared of 0.78) that undoubtedly increases the ultimate credibility of this study. At the beginning of 2013, for example, Mr. Erb utilized the power of his model to impressively predict the bullion's price for a 10-year yield of 3%. His statistical computations indicated the price of gold would reach $1,196.70. One year later, on December 26, 2013, the London Gold Fixing price stood at $1,196.50.
[youtube]http://www.youtube.com/watch?v=xGsnQcEAOuM[/youtube]
But Claude Erb, the man behind this comprehensive model of gold, defends his findings by arguing that the public must not firmly reject these conclusions based on high predictive power (i.e. a r-squared of 0.78) that undoubtedly increases the ultimate credibility of this study. At the beginning of 2013, for example, Mr. Erb utilized the power of his model to impressively predict the bullion's price for a 10-year yield of 3%. His statistical computations indicated the price of gold would reach $1,196.70. One year later, on December 26, 2013, the London Gold Fixing price stood at $1,196.50.