Gold Blues as Silver Woos
February was a tough month for gold, which marked its worst monthly performance since November 2016. Spot gold fell $114/oz, or 6.15%, to close the month at $1,734/oz. Half of this decline came in the two final days of February, as bond selling spiked into near panic mode and triggered a multi-asset sell-off into month-end. Figure 1 shows how gold has been inversely correlated to bond yields.
February’s pullback occurred on the back of various developments. Rising energy prices and the markets’ view on U.S. government spending bolstered the reflation trade with a rally in broader equity markets. The U.S. dollar strengthened as markets priced in a swift economic recovery and as U.S. Treasury yields advanced to the highest level in a year, with the 30-year bond rising above 2% and the rapid move in the 10-year to over 1.5%, which we will discuss in more detail. Meanwhile, gold ETFs saw holdings decline towards the end of February. Silver prices held up m
U.S. stocks staged a rebound rally on Monday, with each of the S&P 500, Dow and Nasdaq rising as retreating Treasury yields and vaccine optimism boosted risk assets.
Australian Dollar Outlook: AUD/USD Eyes Trade Data - Rebound or Breakdown?
2021-02-04 00:00:00
Thomas Westwater,
Analyst
Treasury Yield Curve, Australia Balance of Trade, AUD/USD – Talking Points
Wall Street rally cools but energy sector strength bolsters small-cap stocks
US fiscal stimulus developments push Treasury yield curve to highest level since 2015
AUD/USD subject to movement ahead of Australia’s balance of trade data
Wall Street moved higher for a third consecutive day on Wednesday as traders focused on the economic recovery following upbeat economic data. Upside momentum seen earlier in the week ebbed, however, as technology stocks moved lower despite better-than-expected earnings from Alphabet and Amazon after yesterday’s closing bell. The Nasdaq Composite cut early gains going into the close and put in a 0.01% loss.