The sell-off in gold and silver has continued again today, as bond yields in the US touched a 15-year high.
It’s been a brutal few months in the bond market, as bonds have sold off in the midst of the Fed’s interest rate hikes that have struggled to reign in inflation. As a result, the higher yields have been pressuring the gold and silver markets, with gold dropping below $1,900 and silver falling below the $23 level.
Although the higher yields have been painful on the precious metals, they continue to add held-to-maturity losses for the banks and the Federal Reserve. This is creating an increasingly shaky financial sector that’s being overwhelmed by the higher rates, with even more treasury supply on the way.
Given the correlation of gold to real interest rates over the past decade, there’s a case to be made that the metals prices could be even lower given the current environment. Yet the global gold buying, especially from the central banks has continued to keep the gold price within reach of its all-time highs.
It’s a complex environment, with the Fed policy and the dollar’s response continuing to dictate the trends. And to find out more about the latest moves and news, click to watch this video now!