The stronger energy prices get, the weaker gold gets. In the macro environment, gold isn’t losing to Brent; it’s losing to expectations that the Fed will stay more hawkish for longer and keep interest rates high amid inflation concerns.
In terms of asset returns, both gold and U.S. stocks face the same awkward dilemma when confronted with a 5% risk-free yield: why hold gold or U.S. stocks when you could hold risk-free U.S. Treasuries yielding 5%?
It has to be said that Treasuries yielding 5% are a shock to all asset classes. I remember writing an article last year about how, when the U.S. faces an economic and financial crisis, deliberately creating localized geopolitical or economic crises around the world can strengthen the dollar’s ability to siphon up global capital.
Now there are two ready-made geopolitical crises, and the resulting high energy prices have also increased Europe’s exposure to sovereign debt risks. This really does help the dollar siphon up capital!
Next, once the bond-market sell-off crisis is over, will the U.S. start adjusting its policies and return to rate cuts, reigniting the bull market in U.S. stocks? I think there’s a strong chance!
As for gold, is it a buy? Around $4,000, it really is a good deal. If you want to be more cautious, you can wait a little longer and see whether this pullback in gold breaks below the previous low of $3,950.
If it breaks below, expect further declines. If it holds above the previous low and quickly climbs back above $4,000, it could rise! Of course, macro variables still need to be considered here, especially whether Brent can return to a downward trend.#中国寻求没收61800枚比特币
In terms of asset returns, both gold and U.S. stocks face the same awkward dilemma when confronted with a 5% risk-free yield: why hold gold or U.S. stocks when you could hold risk-free U.S. Treasuries yielding 5%?
It has to be said that Treasuries yielding 5% are a shock to all asset classes. I remember writing an article last year about how, when the U.S. faces an economic and financial crisis, deliberately creating localized geopolitical or economic crises around the world can strengthen the dollar’s ability to siphon up global capital.
Now there are two ready-made geopolitical crises, and the resulting high energy prices have also increased Europe’s exposure to sovereign debt risks. This really does help the dollar siphon up capital!
Next, once the bond-market sell-off crisis is over, will the U.S. start adjusting its policies and return to rate cuts, reigniting the bull market in U.S. stocks? I think there’s a strong chance!
As for gold, is it a buy? Around $4,000, it really is a good deal. If you want to be more cautious, you can wait a little longer and see whether this pullback in gold breaks below the previous low of $3,950.
If it breaks below, expect further declines. If it holds above the previous low and quickly climbs back above $4,000, it could rise! Of course, macro variables still need to be considered here, especially whether Brent can return to a downward trend.#中国寻求没收61800枚比特币