Gold Prices Rally as Stocks Hit New Records, Inflation Forecasts Rise, Next Stimmy Checks ‘Due by End-Month’

GOLD PRICES rallied Monday morning as global stock markets hit fresh all-time highs after US politicians moved to approve new President Joe Biden's huge Covid pandemic stimulus package, and inflation expectations accelerated to a new 7-year record, writes Atsuko Whitehouse at BullionVault. The spot gold price for London settlement edged 0.4% higher to $1821 per ounce after falling 1.9% last week against the US Dollar. With the Dollar rising again Monday to new 2-month highs on the FX market, US Treasury bond prices fell, driving 10-year yields as high as 1.20% per annum, the highest rate of interest since last March's Covid Crisis. The 10-year breakeven rate – the difference in yields between the conventional 10-year Treasury bond and its inflation-protected version – touched 2.21%, extending its run of the highest inflation expectations since 2014. That took the real interest rate offered to buyers of 10-year Treasury debt back down to -1.01%, a multi-decade low when reached as gold prices surged to fresh record highs last summer. "Gold is caught between conflicting macroeconomic drivers amid a weak physical market," says Suki Cooper, director of precious metals research at Asian bank and London bullion market maker Standard Chartered, in her 2021 price forecast. "However" says Cooper, explaining her analysis in the...
0