{"id":227641,"date":"2025-07-22T09:47:12","date_gmt":"2025-07-22T13:47:12","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=227641"},"modified":"2025-07-23T03:59:15","modified_gmt":"2025-07-23T07:59:15","slug":"chart-advisor-gold-suggests-no-rate-cuts","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-gold-suggests-no-rate-cuts\/","title":{"rendered":"Chart Advisor: Gold Suggests No Rate Cuts"},"content":{"rendered":"\n<p>By&nbsp;<a href=\"https:\/\/links.investopedia.com\/u\/click?_t=36ba8fa8372241d58b3bfc06997a4332&amp;_m=27de3ba8d16045eba7dadfe9a194492e&amp;_e=RVOezDK8opodDRiA-qcLbgF5fsSQkzEMJIvXAfENANJTYqdF-38usWPHJrYqfCqUBizqjWBOKd5wEgP8e8bGxYJiSFUNsnTptqZ_1IA0HZvKpPfCuC34x1HHyyqTiu-4yB2xC5ZeTjfKaWNR9ApYCzlatRddv_3Fj_KRba77kkGkURZ-Ur3M62FXEpmWqWdktKmex18ERbrmKvBV8bYC0V8f_YOu8UptHuKOv9UHWliZafdMjIam6Xh4_oLc9lFqv3NA1zINRShakl93G4_P_hnkiN3Us1mFhD9rYsipnCq0_DXTcEq1G5AQCnX4CF6IWSSbRw_JAIzLW8ck3Anh9KS088ptugr72VibQuUwS0N6G8yMDIg0IvZ0y5DQbDQCmA7dr_UR3reHrOl89OgX5MYPe_WIgr3yAxnteBmnU0AVRamI0YVU7BJNrt7iEg6oxtajPTw5BHemB9KZO1uCQ_ayVt7GNLysEsz21RussiM%3D\">C. Theodore Hicks II, CMT, CFP, CKA<\/a><\/p>\n\n\n\n<p><strong>1\/&nbsp;Gold Basing<\/strong><\/p>\n\n\n\n<p><strong>2\/&nbsp;Ten Year Yield \u2013 Secular Trend Change<\/strong><\/p>\n\n\n\n<p><strong>3\/&nbsp;10-Year Consolidates? (Trend Pause)<\/strong><\/p>\n\n\n\n<p><strong>4\/ 10-Year and Inflation<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with CMT Association on this newsletter. &nbsp;The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1\">1\/<\/h2>\n\n\n\n<p><strong>Gold Basing<\/strong><\/p>\n\n\n\n<p>Chairman Powell and the FOMC will meet next week. As they conclude their two-day meeting, they will announce whether or not President Trump will get his Fed Funds rate cut. While I\u2019m not in the business of making forecasts, I think President Trump might be disappointed.<\/p>\n\n\n\n<p>If we look at Gold \u2013 using IAU as a proxy \u2013 it has been building a base since April. While it has not moved higher, it cannot seem to go lower either. Using history as our guide, this suggests that the markets do not believe the battle with inflation is over. A case can also be made that yesterday\u2019s action began a move higher out of this base.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-1-1100x541.png\" alt=\"\" class=\"wp-image-227642 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-1-1100x541.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-1-700x344.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-1-300x148.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-1-768x378.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-1-1536x756.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-1.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2\">2\/<\/h2>\n\n\n\n<p><strong>Ten Year Yield \u2013 Secular Trend Change<\/strong><\/p>\n\n\n\n<p>Chart 2 is showing the yield for the 10-year US Treasury dating back to 1965. The big red trendline is drawn just to illustrate that from 1980 to 2022 we were in a declining interest rate environment. I discuss this in my book,&nbsp;<a href=\"https:\/\/www.amazon.com\/dp\/B0FH65SD2K?ref=cm_sw_r_ffobk_cp_ud_dp_39H3QHZZNEV4WQD7EPF6_3&amp;ref_=cm_sw_r_ffobk_cp_ud_dp_39H3QHZZNEV4WQD7EPF6_3&amp;social_share=cm_sw_r_ffobk_cp_ud_dp_39H3QHZZNEV4WQD7EPF6_3&amp;bestFormat=true&amp;csmig=1&amp;did=18674794-20250722&amp;hid=6b90736a47d32dc744900798ce540f3858c66c03&amp;utm_campaign=chart-advisor_newsletter&amp;utm_content=072225&amp;utm_medium=email&amp;utm_source=investopedia\"><strong><em>Evidence-Based Investing<\/em><\/strong><\/a><em>,&nbsp;<\/em>when the 10-year yield crossed above that trendline, that was a secular trend change.<\/p>\n\n\n\n<p>That has broad implications.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-2-1100x541.png\" alt=\"\" class=\"wp-image-227643 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-2-1100x541.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-2-700x344.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-2-300x148.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-2-768x378.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-2-1536x756.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-2.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3\">3\/<\/h2>\n\n\n\n<p><strong>10-Year Consolidates? (Trend Pause)<\/strong><\/p>\n\n\n\n<p>While the 10-year yield has absolutely broken the secular bear-market trend for yields, I am not yet declaring that we are in a secular bull-market for yields. In other words, rates have risen but I\u2019m not convinced that they will continue to rise. I need to see some more evidence.<\/p>\n\n\n\n<p>Looking at our third chart for today, this is how I see it.<\/p>\n\n\n\n<p>The bottom blue-gray rectangle illustrates what I thought could be an important support level. This is ~3.4%. But yields have not yet come down to that level. So, I no longer really think that\u2019s a solid support area.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-3-1100x541.png\" alt=\"\" class=\"wp-image-227644 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-3-1100x541.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-3-700x344.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-3-300x148.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-3-768x378.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-3-1536x756.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-3.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>The top blue-gray rectangle represents what I think could be an important resistance level.<\/p>\n\n\n\n<p>However, the way yields have played out, I now view the green trend line as support and the red trend line as resistance. The way I\u2019m reading this, this is a bullish pennant thereby implying that rates could very well go higher.<\/p>\n\n\n\n<p>First a reminder that all chart patterns are suggestive, not predictive. Secondly, my team and I do not trade off patterns. However, they do help us see what could happen, so we are thinking in advance.<\/p>\n\n\n\n<p>So, what\u2019s the point?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4\">4\/<\/h2>\n\n\n\n<p><strong>10-Year and Inflation<\/strong><\/p>\n\n\n\n<p>I am an avid reader. On average, I read about 40-50 books each year. At the moment, I\u2019m finishing Ray Dalio\u2019s latest book&nbsp;<em>How Countries Go Broke: The Big Cycle<\/em>. It is a good book &#8230; but you should&nbsp;<a href=\"https:\/\/www.amazon.com\/Evidence-Based-Investing-Long-Term-Sometimes-Short-Term\/dp\/B0FH65SD2K\/ref=sr_1_1?crid=2L5IKRM1A5RPX&amp;dib=eyJ2IjoiMSJ9.-Nlxpb5CarQ7BFccDRYzZuVU-en-xZ01HVC7sOU1-PRTUClC6OjD_LEWaTMoq5KM44HizFUflW5oo3KZSbuclMjXfqywwXAHYL1wlx7S9pv-zNOg96CdvxQW5ciFXrkOQbpYx6sbBixI9AZ1yygr_dHXXHc3fgreNFqNZ0U1xOfHXEXHR6slZimUchPBheGRDsJccUofLVsE2uFv9OY8X_3kbwOes2IhZToi6RnuCl8.9Na1v-Eu6r0SwsWZxtWrKFUYI0M_WWARZ7zkHN9UgpI&amp;dib_tag=se&amp;keywords=evidence-based%2Binvesting&amp;qid=1752844659&amp;sprefix=evidence-based,aps,767&amp;sr=8-1&amp;hid=6b90736a47d32dc744900798ce540f3858c66c03&amp;did=18674794-20250722&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072225\" target=\"_blank\" rel=\"noreferrer noopener\">buy mine<\/a>&nbsp;first. \ud83d\ude09<\/p>\n\n\n\n<p>In Chapter 10 (page 200 in the hard cover) of Dalio\u2019s book, he shows a chart that I\u2019ve tried to recreate below.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"541\" data-src=\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-4-1100x541.png\" alt=\"\" class=\"wp-image-227645 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-4-1100x541.png 1100w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-4-700x344.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-4-300x148.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-4-768x378.png 768w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-4-1536x756.png 1536w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/07\/2025-0722-Tuesday-Chart-4.png 1878w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>The green line is again showing the 10-year yield. The red line is the 3-year average for the Rate of Change in the Consumer Price Index. Notice the relatively high correlation between the two.<\/p>\n\n\n\n<p>When I look at all of this together, it leads me to believe that Chairman Powell will not lower interest rates just yet. I read some very smart economists \u2013 mainly those who do not put a (D) or an (R) behind their name \u2013 who say Powell&nbsp;<strong>should&nbsp;<\/strong>cut. Maybe they are right. I\u2019m only an armchair economist who manages money for a living. This is just how I see it and whether I\u2019m right or wrong has no impact on the trades we enter; it\u2019s just not a part of our investment process.<\/p>\n\n\n\n<p>So, I make no prediction but know that Powell and the Fed seem to believe that keeping rates higher for longer will help keep inflation from moving higher.&nbsp; Ultimately, we want the economy to grow neither too fast nor too slow. We want that Goldilocks economy.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 22nd July 2025<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By&nbsp;C. Theodore Hicks II, CMT, CFP, CKA 1\/&nbsp;Gold Basing 2\/&nbsp;Ten Year Yield \u2013 Secular Trend Change 3\/&nbsp;10-Year Consolidates? (Trend Pause) 4\/ 10-Year and Inflation Investopedia is partnering with CMT Association on this newsletter. &nbsp;The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, [&hellip;]<\/p>\n","protected":false},"author":186,"featured_media":227642,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[21,15,18,6,8,9,22,23,26,3],"tags":[14759,15269,1602,314,12306],"contributors-categories":[13686],"class_list":{"0":"post-227641","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-commodities","8":"category-fixed-income","9":"category-macro","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-stocks","14":"category-technical-analysis","15":"category-text-articles","16":"category-traders-insight","17":"tag-10-year-u-s-treasury","18":"tag-consumer-price-index-cpi","19":"tag-fed-rate-cut","20":"tag-fomc","21":"tag-iau","22":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Gold Suggests No Rate Cuts | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Chairman Powell and the FOMC will meet next week. 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