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I think the decoupling, at least temporarily for the time being - we'll have to see how it goes - of gold and bond interest rates is one of the most spectacular developments these days. In the event of an economic bust, this gap is likely to close abruptly and send shockwaves through the markets.

#gold #markets #yields #bondmarket #debtspiral https://files.sovbit.host/media/863f2c555276e9ed738933b0efee6b021042f16e1529dd755704885b87fee183/79fd4164136583645650d9238af79a05862a67805171022e350c1f4c9b5ba5bc.webp

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Discussion

oldgeezy 1y ago

Let me try to understand this. if the price of gold rises, the return on a 10 year falls. because why hold someone's debt when you can hold an asset that is appreciating. Or is it more the case that low interest rates drive investors to gold which pumps the price.I

in either case, the significance of gold prices rising while 10 year returns are also rising ... is that a reflection of the Treasury paying above market rate for interest..?

Ghost of Truth 1y ago

I think the correlation is: if bonds fall (yield rises) there are rising oportunity costs for holding gold that doesn't yield anything