The 10-year US Treasury yield climbed to 5.35 percent on Wednesday 7 October, reaching levels not seen since 2002. The rise followed a 143 basis-point increase from a pre-Iran-war low, as noted by the Kobeissi Letter, and pushed US mortgage rates to their highest in three years.
Rising yields weigh on precious metals
Gold prices fell to a two-month low of $4,066 an ounce during the session, down from near $4,160 earlier in the day. Silver dropped by about 2.6 percent, reaching an intra-day low of $58.99 per ounce before trading at $59.77 in early afternoon. Meanwhile, China continued to increase its gold reserves, marking the 23rd consecutive month of accumulation. Delegates at the London Bullion Market Association conference expect gold to reach $5,013 within twelve months.
Speculative net long positions in gold and silver declined in the latest Commodity Futures Trading Commission report, shrinking by 7,221 contracts and 3,361 contracts respectively from a week earlier.
Bitcoin retreats amid heavy liquidations
Bitcoin dropped below $84,000, slipping roughly $2,000 within twenty minutes overnight, according to the Kobeissi Letter. Crypto markets recorded $547 million in liquidations over the 24 hours through Tuesday. Despite this, US spot bitcoin exchange-traded funds posted net inflows of $119 million on Tuesday, marking a fourth consecutive day of gains over five sessions, according to CoinDesk.
Auctions and minutes in focus
The US Treasury planned to auction $39 billion of 10-year debt on Wednesday, while the Federal Reserve was set to publish the minutes of its latest meeting at 20:00 Paris time. The Fed had raised its target rate by 25 basis points in September to a range of 3.75 to 4 percent, the first hike since 2023.
The 10-year yield had touched 5 percent in October 2023 but fell back below 3.90 percent within two months, during which bitcoin gained 50 percent. The current yield rise has contributed to renewed pressure on risk assets and precious metals.
Related: US 10-Year Treasury Yield Hits 31-Day High at 5.31% · US 30-year Treasury yield hits 5.48 percent
Source: Federal Reserve · CFTC | Data: U.S. Department of the Treasury
