Gold is struggling under rising inflation concerns as the US-Iran conflict pushed crude oil back toward US$90/barrel keeping US 2-year bond yields firmly above 4%. The inverse correlation between gold and US bond yields is very clear in the chart below and last week’s CPI would normally have added significant support to the precious metal if it hadn’t been for the escalation in hostilities around the Strait.
- We remain bullish towards gold believing central bank tailwinds will resurface in 2026/7 and US bond yields will turn lower.
MM is cautiously bullish towards gold through 2026 around US$4,000
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chart
Spot Gold ($US/oz) v US 2-year Bond Yield – Source Bloomberg
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Spot Gold ($US/oz) v US 2-year Bond Yield – Source Bloomberg
