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

AI desk brief

Gold and silver were whipsawed by the latest US macro data, briefly jumping to $4,218/oz and $61.50/oz before reversing as the dollar firmed and crude rose; both metals still finished September down 8.5% and 13.5% respectively. The key driver remains a fast repricing in real rates: 10-year Treasury yields are up 0.49pp this month and real 10-year TIPS yields up 0.44pp to near record highs, which has pressured bullion despite softer-than-expected PCE inflation and lower odds of another Fed hike in October.

BullionVault notes the gold-real yield relationship has broken down less than 30% of the time over the past 20 years, but the current 9-month correlation is the weakest since the 2020 peak in gold. FedWatch pricing now points to 3.77% policy rates next year, while COMEX gold futures for 12 months out trade around $4,415/oz, up 1.4% from Monday’s 8-week low.