​Gold and Treasuries gain on a flight to safe-haven assets

2023-10-10
Summary:

Treasury yields plunged, the biggest drop since March, as Fed's dovish remarks and Middle East tensions drove a flight to safety.

Treasuries yields fell the most since March after Fed officials made dovish comments and rising tension in the Middle East fuelled a flight to safer haven.

Some strategists say it is premature to call the end of selloff in US government bonds. Treasury yields had climbed to their highest levels since 2007 last week.


Both Fed Vice Chair Philip Jefferson and Dallas Fed President Lorie Logan indicated that higher bond yields will be weighed by policymakers in assessing whether more rate hikes are needed.


Gold prices hit a more than one-week high on Tuesday. Traders are now pricing in an around 28% chance of another rate hike from the Fed this year, according to the CME Fedwatch tool.


Hedge fund managers trading Comex gold futures have flipped to a net short position for the first time in 11 months, while investors in exchange-traded funds have continued to sell the metal.


Oil prices edged down slightly on Tuesday after gaining more than 4% in the previous session. Now the 50 EMA acts as a solid resistance.

XBRUSD

Venezuela and the US have progressed in talks that could provide sanctions relief by allowing at least one additional foreign oil firm to take Venezuelan Crude Oil under some conditions, sources said.


Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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