Gold's Wild Ride: Why Investors Are Misreading It

0:00Morgan Stanley's metal strategist, Amy Gower, just broke down why investors are misreading Gold's wild ride. Spot Gold sits at about $4,678 per ounce right now, of 7.8% year to date, but it's dipped lately amid fresh geopolitical heat from the Iran conflict starting late February. Unmight pass shocks like COVID, or the Russia Ukraine war, where gold usually rallies as a safe haven. This time it's pulling back first, due to liquidity crunches. The big shift comes from a macro reset oil prices spiking over $100 a barrel, fueling inflation fears and killing hopes for fed rate. Cuts Markets now see almost 98% odds of no change at the late April Fed meeting, with Treasury yields climbing from 3.96% to 4.39% on the 10 year. That makes non-yielding gold less appealing when stocks hold steady, like the S&P dropping just 5.1% last month, while gold fell over.

1:0213. Gower says this initial sell-off is typical in crises, gold super liquid, so folks dump it for cash or margin calls. But the real twist is rate, bets flipping the script, plus a creeping stronger dollar hitting gold hard. Gold prices are rethinking its safe haven role, as stocks show resilience on solid earnings outlooks. Wall Street stays bullish long-term though. Goldman Sachs eyes $5,400 by end of next year. JP Morgan is $6,300, UBS around $6,200 through mid-year. Central banks grab $863 tons last year, keeping demand firm despite ETF risks if the Fed goes hawkish. Bottom line, gold's past stays choppy short-term with technical bounces off key averages in the $4,500 range, but the structural. Bull case holds if you zoom out. Fiat worries and real asset hunger ain't fading anytime soon.

2:02That wraps Durham news today, brought to you with AI.