Gold Down 8.5% in Sept, Silver -13.5% as Real Yields 'Re-Price Fast' - BullionVault

AI desk brief

Gold and silver whipsawed on the latest US data but ended September sharply lower, with gold down 8.5% and silver off 13.5% as the dollar firmed and real yields re-priced higher. Spot gold briefly spiked to $4,218/oz and silver to $61.50/oz before reversing; the move coincided with US Q2 GDP revised up to 2.2% annualized and PCE inflation revised down to 5.0%, while August PCE ran at 3.4% y/y, still above consensus but enough to cut the odds of another October Fed hike below 35%.

The article argues the key bearish driver for bullion is the fast rise in nominal and inflation-protected Treasury yields, with 10-year TIPS yields adding 44 bps in September to near-record highs and conventional 10-year yields rising to 5.24%. Despite that, gold futures for 12 months out were still quoted around $4,415/oz, and the piece notes the strong negative relationship between gold and 10-year real rates over the past nine months has only rarely been this tight.