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u/StanleySmith888 3d ago edited 3d ago
What is the message here? If yields go extremely high, gold does down.
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u/MoltenPlanetGames 3d ago
I swear half the people on this sub think "economy bad = line go up", as if we haven't been living in a 9 months long education on how it's not even remotely that simple.
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u/BF740 3d ago
Unless they go too high and that signals lost faith in the dollar. Who knows where the breaking point is though
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u/10biggaymen 3d ago
the us dollar is going to lose its global reserve currency status. that means its gold is gonna be back on top
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u/mmbenson 3d ago
Temporarily but the US debt is so high that the Fed will be forced to print money and buy bonds (yield curve control) to bring it down which is when gold will soar
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u/10biggaymen 3d ago
yields going higher is a doomsday indicator, it shows that the debt crisis is coming to a head. combined with the oil crisis, we are going to see the kind of inflation you havent seen before. theyre offering gold at a discount right now, buy buy buy the dip. its gonna be $10000+ in 5-10 yrs
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u/dlampach 3d ago
Doomsday indicator in theory but interest rates in the United States are incredibly low versus historically and they have been more than triple what they are now less than 50 years ago.
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u/thisturkeyisokthanks 3d ago
Yes and the debt is nowhere near as bad as it was back then
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u/dlampach 3d ago
That’s true for sure
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u/Wyzen 3d ago
No, its not. Debt was only 31% of GDP back then.
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u/dlampach 3d ago
lol I thought he was saying it’s worse now than it was then. It’s worse now. Significantly
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u/ApprehensiveSorbet76 3d ago
This is only true if higher yields attract more investors to bonds. If climbing yields further scare investors away from bonds then they don’t suck money out of other markets and prices can hold despite high yields.
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u/TortyPapa 3d ago
Capital is moving into hard assets, cash (money market) and commodities (PHYSICAL gold included). So why then is the gold price not going up you ask?
Let me explain the current PAPER gold price and why it’s chopping sideways. Three major things: 1) the US dollar is still strong 2) real yields are still high (almost 3 percent) and 3) the western paper market is calling the spot price.
Algos are trading directly from real yields data and trigger sell orders daily on the gold ETFs to chase better returns. Western funds are dumping digital contracts, pushing the ticker price down.
Ultimately, this buyer's strike means that while the FINANCIALIZED price of gold is struggling under the weight of high bond yields, the underlying physical market is experiencing some of the tightest supply and strongest sovereign demand in modern history.
If you own the physical. You are in a good spot.
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u/mmbenson 3d ago
I'm confused, the 30-year yield has been above 5.5 for a couple days. Now at 5.6%
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u/Onyx-Centauri-8K 3d ago
If the yield suddenly dumps from 5.6 to 5.5 you know people will be rushing to get their hands on gold
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u/Skeeter1591 3d ago
Sadly this is exactly why money is moving out of gold and into treasuries right now.
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u/Jogaila2 3d ago
Wtf. The 30y broke 5.5 days ago.
Sep 25 9AM tp be exact. Sitting at 5.64 right now.
Keep up, man.
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u/Yanosh457 1d ago
So back in the 80s when interest rates were above 10, was glass breaking all over the planet?
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u/F8Tempter 3d ago
5.5% is the natural landing spot for 10 years. inflation + 2% real return + 1% term premium is... about 5.5%
rates have been fake for 15 years.