Dollar Surges as Hawkish Repricing Sinks Gold and Silver
The US dollar strengthened on Wednesday after hawkish repricing at the front end of the US curve, sending gold and silver prices lower.
A very punchy September flash PMI report showed US business activity accelerating to its fastest pace in over five years, with employment growth surging and price pressures intensifying. This helped drive up yields across the Treasury curve, with the five-year sector hit particularly hard.
The dollar itself has been trading closely with front-end nominal yields, with a correlation of +0.75 with the US 2-year yield over the past five sessions.
Gold and silver prices continue to hold around levels seen throughout much of September, despite the dollar breaking to multi-month highs and yields hitting historically high levels by modern standards.