Gold: Short End US Rates Matter More Than Long End Real Yieldson February 23, 2017 at 14:59
In the many years following the GFC, quick end yields in the US had been contained for an extended period of time as the Fed committed to maintaining rates on hold. Offered the static nature of the brief end, and the shift of monetary policy implications additional out the curve via QE applications, long finish US costs became the concentrate. When discussing the drivers of gold rates, extended finish US actual costs (the yield on inflation protected bonds) was the crucial element. Even so above the previous couple of many years, the Fed has hiked charges twice, and we now have dwell meetings with an lively brief end. This has reduced the influence of prolonged end actual prices on gold, and as an alternative shifted the focus to the brief finish. We now form our view on gold rates mind-boggling primarily based on quick end rates, as opposed to extended finish yields. Our bearish see on gold prices is derived from a Fed hike in June.
The Historical Correlation
Searching back at the connection between gold charges and US real charges