UNITED STATES January 23 2017 3:30 PM
NEW YORK (Scrap Register): Historically, there is an inverse relationship between a U.S. president’s approval rating and gold prices, pointed out HSBC.
Analysts mentioned the tendency in a research note before Donald Trump is inaugurated as U.S. president on Friday. Trump will be the first president in history with a higher disapproval than approval rating, according to the national polls, HSBC noted.
“We have discussed in previous reports the inverse correlation between gold prices and presidential approval rating. Should Trump’s approval ratings decline – or disapproval ratings rise – gold could get a bump higher,” HSBC added.
According to Brown Brothers Harriman, yields on U.S. 10-year Treasury notes have ticked higher since bottoming at the start of the week. This is significant for gold traders, since the precious metal often moves inversely to the yield.
Further, yields affect the U.S. dollar, and gold also has an inverse relationship to the currency. U.S. 10-year bond yields bottomed this week on Monday near 2.30% and now are (tryin