For those of us who bailed on gold, we are now putting together the elements of a buy signal per Hussman’s system. Today’s weak Philly Fed knocked bond yields and added the rate signal. It could also foreshadow a weak ISM (NAPM) in the early October report, which would complete the signal.

“Not surprisingly, the combination of all of these is rare but extremely powerful. In the rare instances when 1) The rate of inflation has been higher than 6 months earlier[check], 2) Treasury bond yields have been lower than 6 months earlier[check], 3) the NAPM Purchasing Managers Index has been below 50[not yet], and 4) the Gold/XAU ratio has been above 4.0[check], the XAU has soared at an astounding rate of 123.63% annualized. In contrast, when none of these have been true, the XAU has plunged at -53.21% annualized. That’s a gaping difference.”

Going For The Gold