Bonds bearish with gold blah - what's wrong with this picture?

Bond shorts are much happier than gold bugs right now. The relative movement from the peak for TLT (dropping ~17%) has been a much better ride down, while gold's rise (~12%) has been much more volatile along the way during this same time period. Here are the charts for TLT and GLD:



While I don't discount the possibilities for gold to continue rising, it certainly doesn't seem to be acting as a classic inflation hedge against bond rates rising. Then of course, Treasury rates are still at relatively low levels (and Treasury prices at relatively high levels) compared to their levels prior to November 2008. Once again, in these times, there are cross-currents that undercut assumptions about traditional asset class relationships.

From a chart perspective, gold is at risk of running out of steam but hasn't violated channel trendline or moving average support at this point. Conversely, bonds are searching for a support level and are likely to find it either now or soon. The first goal of any bond rally would be the mid-line of the Bollinger Bands, meaning approximately the 20-day moving average (which for TLT is only about 109.50 right now). That's also close to overhead resistance (for TLT, just above 110), and also where the 50-day moving average is likely to be if such a rally were to occur anytime soon. If and when such a rally presents, it will also have to bring up the technical indicators very substantially in order to look like anything bullish in bonds.