Correlation study on gold prices and US10Y bond yields
Taking 1st of January 2015 as the starting point, I overlapped gold prices and US10Y bond yields to review the correlation between these. The scales are by percentages taking 2015/01/01 level as zero point.
The correlation is apparent as we know about it. I noted two points in this chart:
(1) The correlation cycle is diverging since the beginning of year 2017. Personally, I take the starting point of this divergence at mid-December 2016 when Trump announced that his economic policy would not favor strong USD, and this speech badly shocked the markets who were holding great expectations on USD.
(2) As of today, gold prices recovered well back to price levels before US election, on the other side US10Y bonds yields are still much above their November.2016 levels, This might be due to the quantitative tightening actions of FED. Recently, US10Y bonds yields are defending the 2.100-2.200 band, but the general bias is on further decrease side with a big risk.
The correlation is apparent as we know about it. I noted two points in this chart:
(1) The correlation cycle is diverging since the beginning of year 2017. Personally, I take the starting point of this divergence at mid-December 2016 when Trump announced that his economic policy would not favor strong USD, and this speech badly shocked the markets who were holding great expectations on USD.
(2) As of today, gold prices recovered well back to price levels before US election, on the other side US10Y bonds yields are still much above their November.2016 levels, This might be due to the quantitative tightening actions of FED. Recently, US10Y bonds yields are defending the 2.100-2.200 band, but the general bias is on further decrease side with a big risk.