Gold at a Crossroads: Rates, Risk, and Stagflation…
With emerging market demand softening, who drives gold next Recently, World Gold Council [WGC] said, Stubborn stagflation about gold in their published, Gold Market Commentary. The report suggests further, the relationship between the price of gold and its core drivers shifts over time, sometimes reflecting who is most active in the market. For example, US real interest rates (opportunity cost) were tightly linked to movements in gold between 2007 and 2022. Last month we suggested that one reason for gold’s decoupling from rates post 2022 was the preponderance of emerging market demand from central banks and other investors, rather than a breakdown in US investor relationship with rates. Now that central banks and Asian investors have stepped back a bit, as indicated by our Gold Demand Trends data, local premia and intraday session returns, a tighter gold-rates relationship could re-establish itself and Western investors (particularly the US) could become mor...