Gold: Strong correlation with the USD and 10Y USTs – Standard Chartered

Analysts at Standard Chartered explains that gold maintains a strong correlation with the USD and 10Y USTs as the three-month rolling correlation closed in on 80% with the USD last week and surpassed 70% with USTs, highlighting the continued importance of US-centric data.

Key Quotes

“The first US-China meeting was overshadowed by US missile strikes on a Syrian airbase following a deadly chemical weapons attack. Given light market positioning there is scope for safe-haven flows; however, complacency suggests prices are more likely to range-trade in the near term. Gold is caught between rising tensions that could stoke safe-haven flows, and the market looking through the geopolitical risks to the next US rate hike given the tight correlations.”