Gold probing multi-month highs at $1870 amid bullish bank calls

November 15, 2021

Spot gold is currently probing multi-month highs at $1870.The precious metal will take its cue mostly from Fed-related developments this week.

Real yields across developed markets remain close to record lows, with the US 10-year TIPS currently around -1.17% and the German inflation-linked 10-year yield currently under -2.0%. The fact that real yields are so low (and financial conditions thus so accommodative) despite the recent acceleration of headline inflation rates across developed markets has resulted in central banks like the Fed and ECB facing criticism for being too dovish. In other words, letting inflation run out of control and keeping interest rates low anyway, thus pushing real yields excessively low. Whether or not central banks are making a dovish policy mistake, gold is a big beneficiary, as lower real yields reduce the opportunity cost of holding gold. US real yields are on Monday trading with a slight downside bias, which helped the spot metal off earlier lows.

Real yields across developed markets remain close to record lows, with the US 10-year TIPS currently around -1.17% and the German inflation-linked 10-year yield currently under -2.0%. pic.twitter.com/NG3tPq5u3F

— 360ForexSignals.com (@petromenea) November 15, 2021