We are removing Gold from Investing ideas in the aftermath of reported Q4 U.S. macro data and a Fed meeting which was largely uneventful. Remember, we like Gold (which is quoted in U.S. dollars) against a declining dollar and a compressing yield curve.
The truth is that the 10-year Treasury yield has ticked up to 2.0% from 1.65% at the end of January. The dollar is down 0.70%, but we believe the incremental FED reversion on an interest rate cut on the back of a Q4 GDP miss would have been more of a catalyst if this trade had legs.
Over the longer-term, we still think the dollar could strengthen against the Euro and Yen which would be bad for Gold by historical evidence.
