VOT Research Desk
Nov1,2022
Market Analytics and Considerations
According to Deutsche Bank, the seven-month decrease in gold prices is the longest after 1869.
The price of gold fell 1.6% in October and is now down 11% from the year’s beginning.
Real bond rates have risen dramatically in tandem with the decline in gold prices.
According to Deutsche Bank, gold prices fell 1.6% in October and have been falling for seven months in a row, the longest slump since 1869.
The period during which the US dollar was exchanged for gold comprises a significant portion of that time, which resulted in little change in the price of the precious metal.
However, analysts at Deutsche Bank also pointed out that such a losing streak hasn’t occurred in half a century since the United States left the gold standard and the Bretton Woods currency exchange system.
Tuesday, gold traded at $1,643.56 per ounce, up 1.21 percent from the beginning of the year. As a result of the Federal Reserve and other central banks’ aggressive rate hikes, inflation-adjusted bond yields have increased significantly.
According to the note, the rise in real yields—from -0.49% in March to 1.54% in October—has diminished the appeal of a non-interest bearing asset, even as inflation has remained high.
However, Deutsche Bank research strategist Jim Reid claims that despite the sharp decline this year, gold has still outperformed the majority of notable assets. Gold, other than oil, is the asset that has been closest to parity so far in 2022.
Thus, relative to virtually all other global assets, it has performed better.
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