Ashutosh Sureka

Gold moves inversely with real U.S. rates as oil and inflation drop, Robin Brooks notes

Gold moves inversely with real U.S. rates as oil and inflation drop, Robin Brooks notes
Gold drops as real U.S. rates rise

Robin Brooks highlights that gold prices tend to move in the opposite direction of real U.S. interest rates.

He explains that recent increases in real rates are being driven by expectations of a more hawkish approach from the Federal Reserve under Warsh, along with a sharp decline in oil prices and tumbling inflation.

Brooks previously examined how a peace deal could reduce the risk premium in Brent crude, leading to $85 oil and $4 gasoline prices in the U.S. He also expected Brent crude prices to remain in the $80-90 range due to war-related risks. Movements in energy prices have been a recurring theme in his analysis.

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