Interestingly, gold rallied from December 2015 to July 2016. Unlike equities, gold prices have been declining since July 2016 in a response to rising yields along the yield curve. Therefore, the bearish view for fixed income prices has been confirmed by weak gold prices, which are declining because rates/yields are rising and are expected to rise further. Rates/yields would not be rising unless the economy was expected to continue to reflate/grow / expand. The current rally in the equity market indicates that the economy is currently expected to continue to improve. Importantly, the indications remain, “nominal rates” are behind the inflation rate, and therefore “real rates” have not become restrictive.