As a follow up to my most recent commentary on gold and interest rates, I have attached what I consider to be two very interesting slides. The first relates to the net positioning of two of the most widely traded long-term US Treasury futures - 10-year and 5-year Treasuries. It shows that hedge funds' Treasury short positions are at a massive 20-year high. Now this has tremendous potential importance and relevance from a gold price perspective. As we discussed previously, gold is driven by ‘real’ interest rates (nominal rates less inflation). The second graphic that I've attached shows clearly the relationship between real interest rates and the price of gold - which move in opposite directions. Bond prices have started moving higher since Trump's election and Treasuries have become shorted as a result, with yields declining. As yields fall, the shorts on the treasuries get squeezed and yields fall further. When yields decline, real rates decline (because inflation has remained relatively constant). And when real rates decline, gold has the opportunity to push higher. So watch this space.