Rising yields on US ten-year bond yields have created an incredible opportunity to buy now – though you’ll need to act quickly to benefit fully. This week’s window to buy comes as yields increase though gold is expected to quickly regain its bullish momentum should signs emerge that planned rate hikes or tempering are slow or delayed.
Commerzbank also warns that real returns on yields remain in negative territory, meaning that not all is as it seems and things could quickly change. Writing in a briefing note earlier today he explained, “The gold price has dropped to £1,286 ($1,740) per troy ounce this morning, which puts it back at the level it reached last week following the Fed’s meeting. Gold had already shed its initial gains again during the course of trading yesterday. The price slide is continuing today.
“A headwind for gold is being generated above all by steeply rising US bond yields. Ten-year yields are now at 1.54%, their highest level in three months. Because market-based inflation expectations have increased only marginally at the same time, the rise in yields has led to noticeably higher real yields. Admittedly, they are still unequivocally in negative territory, at -0.87%.”
Buy now before the gold bulls regain control (see next story as to why this could be sooner than you think).