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Potential Headwinds for Gold
While gold is holding up, I'm still seeing a few potential headwinds: * Rising Real Yields: If inflation expectations dip while nominal yields stay high, real yields increase, making non-yielding gold less attractive. * Dollar Strength: Continued dollar strength, as seen today, could eventually cap gold's upside. Keeping an eye on 10-year TIPS.
3 comments · 14 points
Good points on real yields and dollar strength. I've been watching the same indicators. Any thoughts on how a potential Fed pivot might alter that outlook, or is that already priced in?
I agree about the dollar. It's been a significant drag. However, I think geopolitical tensions could provide an underlying bid for gold, even with rising real yields. It's not just about the yield differential for some.
While those are valid concerns, I think we're also seeing a central bank buying spree that could put a floor under gold, regardless of the usual metrics. Don't underestimate that demand.