Emirates NBD Research
 

Find anything about our articles and more.
Enter a query in the search input above, and results will be displayed as you type.

Try typing "Dubai Economics", "Dubai GDP", "GCC Macro"

Emirates NBD
Search
Subscribe
   
  • Home
  • Economics

    Emirates NBD Research provides detailed coverage of 16 GCC and MENA economies, analysing them from a top down macro and strategic perspective as well as by a bottom up sector by sector approach.

    • SUBTOPICS
    • GCC Macro
    • MENA Macro
    • Global Macro
    • Sector Economics
    • Monthly Insights

     

    Latest Article Lebanon continues to face multiple challenges
    Latest Article UAE: A mixed bag of data in January
    Latest Article Moroccan growth will outperform MENA oil importer peers in 2021

     

  • Markets

    Emirates NBD Research publishes reports on global forex, rates and commodities, as well as regional fixed income and equity markets.

    • SUBTOPICS
    • Foreign Exchange
    • Fixed Income
    • Commodities
    • Equities
    • Monthly Insights

     

    Latest Article IEA lowers demand forecasts
    Latest Article Monthly Insights: January 2021
    Latest Article Gold prices stumble to start 2021

     

  • Daily
  • PMIs

    Emirates NBD sponsors Purchasing Managers’ Indices for the UAE, Saudi Arabia, Egypt and Dubai. The indices are compiled by IHS Markit, the leading global provider of financial market data.

    • SUBTOPICS
    • UAE PMI
    • Saudi Arabia PMI
    • Egypt PMI
    • Dubai PMI
    • Methodology

     

    Latest Article Dubai PMI moves back into expansion territory in December
    Latest Article Regional PMIs- Saudi PMI rises to year high in December
    Latest Article Regional PMI round-up: A mixed bag in November

     

  • About Us
  • EmiratesNBD.com
  • Subscribe
FIXED INCOME > MARKETS

Gold wobbles as US yields pick up

Edward Bell - Senior Director, Market Economics
Published Date: 12 August 2020

Facebook
Linkedin
Twitter
Email
Print

 

Gold prices have sold off sharply over the last few trading sessions, falling from a record level of USD 2,075/troy oz in early August to USD 1,863/troy oz in early trade today. Prices have managed to recover some ground but at around USD 1,930/troy oz remain around 7% below their peak levels.

The immediate catalyst for the sell-off in gold appears to be the uptick in UST yields. Yields on 10yr UST have gained over 10bps since the start of the week, trading at around 0.67% at present. Inflation adjusted yields have also moved higher, gaining around 10bps from their recent trough level of -1.08% to test -0.99% currently. The uptick in US producer price inflation for July, up 0.6% m/m, also should help to alleviate some near-term deflationary fears.

Gold, silver and UST 10yr yield 1mth performance

Source: Bloomberg, Emirates NBD Research. Note: Jul 13 2020 = 100.

Both gold and UST markets will be anxiously watching the outcome of political debates between the Trump administration, Senate Republicans and House Democrats in the US as to whether a new fiscal support package can be achieved. So far the divisions remain wide—at least by around USD 1trn!—but given the political cost for either side of not reaching a deal some new fiscal plan is likely to emerge. We would expect a deal to help push the UST yields higher—our range for UST 10yr in Q3 is 0.55-0.65% and then moving to 0.65-0.85% in Q4—and also sap momentum away from gold prices. We maintain our forecast for gold at USD 1,790/troy oz on average in Q3 and Q4.

Silver prices have also come under considerable pressure in line with the move downward in gold and likely have further room to fall. Over the past month spot silver rallied from USD 18.93/troy oz to USD 29.86, a gain of 57%. Prices have fallen around 16% from their early August peak and given silver’s high beta to move in gold, a fiscal deal or further gains in UST yields could play out more aggressively in the silver market. We expect prices at an average of around USD 17/troy oz in Q3 and Q4 2020.

Written By:
Edward Bell, Senior Director, Market Economics

RELATED ARTICLES

Gold prices stumble to start 2021
11.01.2021

Joe Biden wins presidential election
08.11.2020

Markets pricing in Democratic victory
27.10.2020

Green bond market has room to expand in MENA
21.10.2020

Monetary Policy Review
03.09.2020

See all

LATEST ARTICLES

Regional growth to be driven by improving global backdrop
13.01.2021

Lebanon continues to face multiple challenges
25.01.2021

UAE: A mixed bag of data in January
21.01.2021

See all
 

 Subscribe to our newsletter


Never miss out what is going on in UAE Economics

KEEP READING MORE

Regional growth to be driven by improving global backdrop

We expect GCC growth to average 2.3 percent in 2021 following an estimated 5 percent contraction in 2020.

ECONOMICS, GCC MACRO - 13.01.2021

Monthly Insights: January 2021

A round-up of our key research insights and forecasts this month.

ECONOMICS, MARKETS - 17.01.2021

Energy markets focus on US presidential election

Oil industry braces for a Biden administration.

MARKETS, COMMODITIES - 25.10.2020

 

Markets pricing in Democratic victory

Anticipation of a Democratic win in the US election is sending yields higher.

MARKETS, FX - 27.10.2020

MENA Quarterly Q4 2020

Our quarterly report on MENA economies

ECONOMICS, MENA MACRO - 13.10.2020

OPEC and allies reach agreement for 2021

The oil market should be able to absorb modest production increases

MARKETS, COMMODITIES - 06.12.2020

Green bond market has room to expand in MENA

Renewables projects across the region could attract new pool of investors.

MARKETS, FIXED INCOME - 21.10.2020

  • Economics
  • Markets
  • PMIs
  • About Us
  • Subscribe to our publications
  • Economics
  • GCC Macro
  • MENA Macro
  • Global Macro
  • Sector Economics
  • Markets
  • Foreign Exchange
  • Fixed Income
  • Commodities
  • Equities
  • PMIs
  • UAE PMI
  • Saudi Arabia PMI
  • Egypt PMI
  • Dubai Economy Tracker
  • Methodology
  • About Us
  • Subscribe to our publications

 


Terms and Conditions
Copyright © 2021 Emirates NBD Bank PJSC. All Rights Reserved