Gold Investor Research Low Complete. Gold to USD 2,200s (AU...

Gold Investor Research

Low Complete. Gold to USD 2,200s (AU 3,342) by June. Update for March 10, 2023 Chris Rutherglen PhD

What a way to end the week! Despite what the headlines may say, the gold price exploded higher due to the breakdown and precipitous fall in yields. Although its launch was timed just after the employment data-release, obviously it had no relation to it because the key non-farm payrolls data-point beat market expectations which otherwise would be considered bearish for gold as it would imply a continued aggressive rate-hiking stance from the FED. In last night’s BRIEF UPDATE, it was noted that in after-hours trading, US Treasury yields had significantly broken down (meaning bond price were breaking higher). This should have been very bullish for the gold price yet it traded flat for much of the after-hours period, as highlighted by the shaded blue region in Figure 1. It wasn’t until a few hours leading up the non-farm payrolls release that the gold price began coiling just under an apparent USD$1,840 price-cap as it stored the ‘rocket fuel’ from the falling yields and then exploded higher moments after the release.

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