Gold's Next Six Months Hinge on One Crucial Interest Rate Threshold
Gold has had its best two years in decades but lost momentum in September. Investors are wondering if this is a temporary pause or the start of something worse.
Trey Reik, GoldSilver's chief economist and former manager for George Soros, believes one number holds the key to gold's next six months: the 10-year Treasury yield.
If the yield reaches 6%, Reik expects gold to struggle for six months to a year. He points out that gold pays no interest, so every time a government bond offers a real return above inflation, it has to compete for investors' dollars.
Reik notes that since 2000, the S&P 500 has increased roughly 400%, while gold has climbed around 1,400%. However, if yields stay low, gold remains an attractive investment. A sustained push toward 6% would change this dynamic.