Gold consolidates as Treasury yields retreat
2023-10-24
Summary:
Gold prices rose as US Treasury yields retreated from above 5%, driven by the Israel-Hamas conflict, with gold surging in the past two weeks.
Gold prices edged higher on Tuesday as benchmark US Treasury yields pulled back from above 5%. Bullion has surged in the past two weeks amid the Israel-Hamas war.
The 10-year yield crossed a key psychological level on Monday for the first time in 16 years. The bond bear market stemmed from the hawkish Fed and robust economy has weighed on gold and stocks.
Pershing Square’s Bill Ackman revealed Monday he was ditching his bearish bet on long-term Treasuries. The billionaire first disclosed his short position in August based on hot inflation.
“There is too much risk in the world to remain short bonds at current long-term rates,” Ackman said in a post on X. He added that “the economy is slowing faster than recent data suggests.”
Nir Barkat, Israel's Minister of Economy, has threatened that Iranian leaders will be wipe off the earth if the Iran-backed Lebanon-based Hezbollah terror group opens a second front against Israel in the north.
Iran has celebrated the Hamas assault but denied playing any part in the operation. It has also called on all Muslim nations to cooperate in confronting Israel.
Gold failed to push above $2000 as expected as traders take some profits off the table after the strong rally from October lows. It may need to hold above the $1960 level to keep the bullish scenario in place.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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