Gold is awakening to headwinds
US Dollar, Swiss Franc, US Treasury and Gold; When you think of a safe haven as a store of value during times of economic and market turmoil, these are the names that immediately come to mind. However, amid current geopolitical tensions, gold has emerged as the only name to claim its reputation, coming at a time when the US dollar and Treasuries are looking anything but. that's for sure. While it is not to say that these instruments have lost their safe haven status, when it comes to what traders and advisors can trust if they see the macroeconomic backdrop continue to deteriorate, Gold still increases in price when other instruments do not.
Perhaps the most impressive thing about gold's recent performance is that it comes despite soaring nominal and real bond gains, which have traditionally hindered gold's popularity due to its lack of interest and often There are costs that exist if we are talking about physical gold.
The chart below shows the symbol for gold (red line) for actual US 10-year gift certificate change adjusted to the tee. The scale was later inverted to find how the relationship found between the schools was broken down. You can see that over the past two decades, when real interest rates fall, gold tends to go higher and vice versa.
Perhaps the most impressive thing about gold's recent performance is that it comes despite soaring nominal and real bond gains, which have traditionally hindered gold's popularity due to its lack of interest and often There are costs that exist if we are talking about physical gold.
The chart below shows the symbol for gold (red line) for actual US 10-year gift certificate change adjusted to the tee. The scale was later inverted to find how the relationship found between the schools was broken down. You can see that over the past two decades, when real interest rates fall, gold tends to go higher and vice versa.
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As Matt Simpson pointed out in his analysis of the latest U.S. CFTC Closing of Traders (COT) report, while real money and early basis accounts have been adding to positions buy gold in these weeks Recently, long positions have hardly been too extreme by historical standards, suggesting that sentiment has not yet reached euphoria as the risk of sudden and frequent reversals increases.