U.S. 10 Year Treasury Yield Rose Again, Metals Get Dumped The Most
U.S 10 year treasury yield rose again to 5.236% after the trading session on Monday. This caused negative price action to the equities and overall market. But the ones that got hit the most are actually precious metals.
While equities turned red today (Monday, Sep 28) due to how strong treasury yields are (check US10Y), but the ones that got hit the most are actually precious metals. XAUUSD price recorded a -4% decline in the past 24 hours toward $4,115 per troy ounce, while XAGUSD recorded a -5.37% decline in the same time period, and barely closed at $60.86.
Even the cryptocurrency market, which typically is more volatile than the precious metals market, they are doing better (compared to metals) recently. Bitcoin is down by only about 1.51% in the past 24 hours.
The general market movement, however, is not that surprising to a lot of analysts. For a long time people often say that when yield rise at a fast pace, and when DXY also keeps going higher, then non-interest bearing asset like gold would suffer the most, especially after gold's explosive move last year.
That being said, while a lot of people might be selling physical gold these days, the long-term outlook for gold remains bullish. Gold believers often believe that gold will see its glory days back the moment that U.S. has controlled its inflation problem a little bit, and the moment there's a slight indication that the Fed will stop hiking interest rates.
Related assets: Gold, Silver, Palladium, Platinum, Copper