Gold's Fair Value Reaches $5,000 as ETF Holdings Hit Seven-Month High Despite Yields Surge
Multiple analysts report a structural shift in gold pricing, with Fidelity's Jurrien Timmer stating gold's fair value has reached $5,000 per ounce as trading shifts from interest-rate-driven to liquidity-driven. Saxo Bank's Ole Hansen notes gold ETF holdings have risen to a seven-month high despite the 10-year U.S. Treasury yield hitting a 20-year high above 5%, indicating a decoupling from traditional inverse yield relationships. Analysts attribute this to growing U.S. fiscal concerns, sustained central bank buying, and broadening investor demand.
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Gold ETF Holdings Hit Seven-Month High as Yields Rise, Analysts Flag Decoupling
Gold ETF holdings have risen to a seven-month high despite the US 10-year Treasury yield breaking above 5%, a 20-year peak, according to a report from Caixin via Tencent Stock. Saxo Bank's head of commodity strategy, Ole Hansen, argues that the traditional inverse relationship between bond yields and gold prices is shifting. He notes that investors increasingly view rising long-term yields as a warning signal for fiscal risk, rising debt costs, and financial instability, making gold more attractive as a non-traditional asset. This marks a departure from the 2022-2023 rate hike cycle, when higher yields triggered ETF selling. Hansen attributes the change to central bank buying, the return of Western gold ETF investors, and strong Asian demand. Separately, Fidelity's global macro director, Jurrien Timmer, estimates gold's fair value at $5,000 per ounce, arguing that gold trading has shifted from an interest-rate focus to a liquidity focus, which he says is bullish for gold if the US Treasury increases bond buybacks with Fed involvement.
Read sourceFidelity Investments Says Gold Fair Value Reaches $5,000 Per Ounce on Liquidity Shift
On September 23, Jurrien Timmer, Global Macro Director at Fidelity Investments, stated that gold's fair value has reached $5,000 per ounce as trading dynamics shift from interest-rate-based to liquidity-based factors. Earlier in September, Timmer had anticipated that market assumptions of the U.S. Treasury continuing to significantly increase buyback operations to lower yields, along with required Federal Reserve involvement, would strengthen the currency debasement trade. He argued that such an environment is favorable for gold. The analysis highlights a structural change in gold pricing drivers, moving away from traditional interest rate sensitivity toward broader monetary liquidity conditions.
Read sourceSaxo Bank: Gold Prices Decoupling from Interest Rates as ETF Holdings Hit Seven-Month High
According to a report by CLS (Cailianshe) on September 23, Saxo Bank's Head of Commodity Strategy, Ole Hansen, suggests that the traditional inverse relationship between gold prices and interest rates may be shifting. Hansen notes that despite the 10-year US Treasury yield recently breaking above 5%, reaching a 20-year high, gold ETF holdings have continued to rise, climbing to their highest level in seven months. This indicates that growing concerns over US fiscal health are altering the relationship between bond yields and gold prices, with the two increasingly decoupling. The current surge in yields is primarily driven by persistent US inflation and a renewed spike in long-term government bond yields. However, supported by investor demand for gold, this has not triggered a new wave of ETF selling; instead, gold has shown resilience. Hansen observes that this time, not only are gold prices decoupling from yields, but ETF holdings are also showing signs of decoupling.
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Fidelity Investment: Gold's Fair Value Has Reached $5,000 Per Ounce, Says Global Macro Director
Fidelity Investment's global macro director, Jurrien Timmer, stated that gold's fair value has reached $5,000 per ounce, as the metal's trading dynamics shift from being based on interest rates to being based on liquidity. Timmer, who made a similar forecast in early September, expects that market assumptions about the U.S. Treasury significantly increasing its repo operations to lower yields, requiring Federal Reserve participation, will strengthen the currency debasement trade. He argues that this environment is favorable for gold, supporting his $5,000 fair value estimate.
Gold ETF Holdings Rise to 7-Month High Despite Real Yields at 20-Year Peak, Signaling Anchor Shift
This article analyzes the breakdown of the traditional inverse relationship between U.S. real interest rates and gold prices. Ole Hansen, head of commodity strategy at Saxo Bank, notes that while the 10-year real yield hit a 20-year high of 2.63%, gold-backed ETF holdings have risen to a seven-month high, defying historical patterns. Hansen attributes this shift to investors increasingly viewing rising long-term yields as a signal of fiscal risk and financial instability rather than just an opportunity cost for gold. He points to sustained central bank buying, the return of Western ETF investors, and Asian demand as broadening gold's investor base and reducing its sensitivity to rates. Indrani De of FTSE Russell adds that central banks, which have doubled their gold purchases compared to 2010-2021 levels, are insensitive to yield-driven opportunity costs, further decoupling gold from yields. She emphasizes that the reason for rising yields matters, with fiscal dominance and capital competition from AI, infrastructure, and green energy reshaping the environment. Fidelity's Jurrien Timmer argues gold has shifted from a 'rate trade' to a 'liquidity trade,' driven by recovering global M2 money supply, and sees gold valued at around $5,000 per ounce under this model. He warns that loose fiscal and monetary policy is negative for the dollar and positive for gold.
Read sourceGold ETF Holdings Hit Seven-Month High as Price Decouples from Rising Bond Yields
According to a report by 财联社 on September 22, Saxo Bank's head of commodity strategy, Ole Hansen, argues that the traditional inverse relationship between gold prices and interest rates may be shifting. Despite the 10-year U.S. Treasury yield recently breaking above 5%, a 20-year high, gold ETF holdings have risen to their highest level in seven months. Hansen attributes this decoupling to growing investor concerns about U.S. fiscal health, rising government debt costs, and financial stability risks, which make gold more attractive as a non-traditional financial asset. He notes that while rising yields triggered gold ETF selling in the 2022-2023 rate hike cycle, the current environment sees ETF holdings showing resilience, supported by central bank buying, the return of Western gold ETF investors, and strong Asian demand. Separately, Fidelity Investments' global macro director Jurrien Timmer estimates gold's fair value at $5,000 per ounce, arguing that gold trading is shifting from an interest-rate basis to a liquidity basis. He suggests that if the U.S. Treasury increases bond buybacks to lower yields, potentially requiring Federal Reserve involvement, it would strengthen a currency-devaluation trade, which is positive for gold.
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