Gold reaches all time highs ” /> against the euro and the Japanese yen
As a non-yielding asset,( as opposed to a negative yielding one), gold’s opportunity costs look attractive as the Germany 10-year yield currently trades around minus 40 basis points. Meanwhile, Japan’s 10-year bond offers a negative yield of three basis points.
The rally ” />we see in gold is just a function of weakness in the other currencies, in other words record highs in gold v other currencies are a reflection of growing weakness in the forex market.
Currency debasement is typically a primary force for advancing the price of the benchmark store of value, but it’s less about the price of gold advancing and more likely reflects the value of paper currency in decline
The US dollar is showing resilience but then it’s getting a lot of help. Should we see equity market correction this could result in ATH for gold against the worlds reserve currency.
Gold does look like an attractive asset compared to European and Japanese bonds. However, these are two currencies have more to do with structural issues in the euro and yen
All the while Central Banks keep stacking gold bullion.
The euro has lost significant ground against the U.S. dollar since the start of the year, falling from $1.125 to its latest low at $1.085. The euro still has more room to fall against the U.S. dollar. The euro is trading at its lowest level against the greenback in two years.
At the same time, the U.S. dollar continues to trade at the top of its range against the yen.