PRESS ROOM
Higher yields weigh on gold prices
Friday 08th October '21
After gaining some ground towards the end of August, gold fell again over September. Despite persistently elevated inflation prints across major economies including the US, Eurozone, and the UK, gold has struggled to build positive momentum this year. This is likely due to a combination of two things. First, inflation expectations have moved largely sideways (as illustrated by 10-year US breakeven rates) since the start of June. This suggests that markets have not yet internalised the notion that higher levels of inflation may persist for longer. If inflation prints remain elevated in the coming months, we may see more investors look to add inflation protection. Second, while gold awaits support from rising levels of inflation, it has faced headwinds from rising yields and an appreciating dollar.