"This ought to be negative for gold and while it did sell off briefly in tandem, it's since rocketed past where it was to a fresh record high this morning with spot gold to $3,759. It comes as nominal US Treasury yields climbed again yesterday, with the benchmark 2-year treasury yield this morning at a more than two-week high near 3.60% and the 10yr yield also climbing to near 4.15% this morning, though this is still below the low of the May-September range."
"Gold is rallying because of physical demand from central banks but mainly because investors don't buy monetary policy decisions being made chiefly to lower debt interest payments by governments that spend way beyond their means. Wall Street closed higher despite a soft open - all three major indices posting record intra-day and closing highs.. AI is the driver of course - this time Nvidia's plan to invest $100bn in OpenAI, the company behind ChatGPT."
TIPS yields and the dollar bottomed around September 16 and have since risen, with 10-year TIPS up over 10 bps and DXY higher. Nominal US Treasury yields climbed, with the 2-year near 3.60% and the 10-year near 4.15%, still below the May–September range low. Gold reached a record spot price of $3,759 driven by central bank physical demand and investor distrust of monetary moves aimed at reducing government debt costs. US equities closed at record highs as AI enthusiasm lifted Nvidia, Oracle, and Apple on stronger iPhone demand and bullish analyst targets. European markets opened higher and Asian markets saw records; a new Fed governor urged lower rates while the Fed chair will give a more balanced view.
Read at London Business News | Londonlovesbusiness.com
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