Rising Bond Yields Are Driving Down Price of Gold

The yield on 10-year bonds exceeded 4.5% per annum – a 16-year high. The demand for them was promoted by:
→ tough statements from the Fed last week that the high base interest rate will remain as long as necessary. Moreover, Minneapolis Fed President Neel Kashkari said he expects another increase;
→ concerns related to the likelihood of a US government shutdown on October 1. At the same time, Moody's issued a stern warning, jeopardizing the country's triple-A rating.

It can be assumed that investors choose bonds when forming a portfolio of protective assets. This puts pressure on the gold, which “loses its shine” in their eyes.


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