The recent leg higher in US Treasury yields continues to press down on gold and with rates expected to stay high, or even higher, for longer then the path of least resistance for the precious metal looks lower.
Thursday’s robust final Q1 US GDP reading – 2% actual vs 1.4% forecast and 2.6% prior – sent US Treasury yields spinning higher. Markets took yesterday’s number as a sign that the US economy is doing better than previously thought, allowing the Fed room to hike rates further in its fight against inflation. The latest market expectations point to rates staying higher for longer with the first rate cut pushed out to the middle of Q1 next year. This is in stark contrast to expectations seen 2-3 months ago when interest rate cuts were predicted for late Q3/early Q4 this year.
