Gold underperformed year-to-date as economic recovery and risk-on sentiment continue. Strategists at HSBC downgrade gold to neutral because they think it will be difficult for the precious metal to rally strongly from current prices amid now higher bond yields.
XAU/USD has been weak as inflation expectations have pushed higher
“Inflation expectations remain elevated but appear to have peaked. We think inflation concerns will be temporary and mild with central banks still committed to keeping loose monetary policy.”
“The US 10 Year Treasury yield appears to have stabilised around 1.6% after hitting recent highs of 1.75% at end-March signaling that inflation concerns may be abating for the time being.”
“Short-term, we have downgraded gold to neutral as we don’t expect significant capital appreciation over the next 3-6 months, especially with bond yields still elevated.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.