"[hot] tomorrow! The grand annual meeting of the metal industry will begin! Come and watch the business cards of the guests.
SMM: with the significant progress made by novel coronavirus vaccine, the focus of investors has shifted from the number of new cases in novel coronavirus and the blockade measures in various economies to a potential rebound in economic growth, which will pave the way for higher inflation.
On Tuesday, December 1st, the 10-year and 30-year break-even inflation rate, an important indicator of inflation expectations, rose, reflecting higher inflation expectations. Among them, the 10-year break-even inflation rate in the United States hit 1.83%, the highest since May last year.
Meanwhile, the swap rate, which measures expectations of five-year average inflation, has risen to 2.25 per cent, above the 2 per cent inflation target the fed has failed to meet for years. This indicator hit a record low of 1.2 per cent in March, when financial markets were most volatile caused by the novel coronavirus epidemic.
As inflation expectations rose, longer-term Treasuries sold off, given that inflation would erode the real value of fixed interest on bonds.
Late Tuesday in new York, the yield on the benchmark 10-year note rose 8.71 basis points to 0.9260 per cent, up from less than 0.7 per cent just two months ago. The yield on 20-year Treasuries rose 9.94 basis points to 1.4574%. The yield on the 30-year Treasury note rose 10.09 basis points to 1.6682%.
While inflation expectations hit a high, gold rebounded from a five-month low.
For gold, it is important to know that one of the reasons to be bearish on gold was that US interest rates were higher, but now that real interest rates are further lower (the red line represents the inversion of real interest rates), whether the price of gold is oversold.
Daniel Ghali, commodities strategist at TD Securities, believes that gold has hit bottom, and the main logic is that the novel coronavirus vaccine will promote economic recovery, which in turn will push up inflation expectations and support the long-term development of gold when real interest rates are low.
