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Gold and Silver Get Crushed as End-of-the-World Trade Implodes
As investors fretted for most of the year that the trade war and slowing growth would end in a global recession, assets like gold and sovereign bonds provided protection. That ended spectacularly Thursday.
Gold lost as much as $30 an ounce, Treasuries tumbled the most since summer and defensive equities sank. While continued signs of a detente in the U.S.-China trade war sparked the day moves, such a beat-down has been months in the making as peak pessimism on global and U.S. growth has ebbed.
“If you’re priced for a pretty direct move into recession, which is what bonds, the yield curve, and some, but not all U.S. data, were pointing to late in the summer, suddenly you’re walking that back and saying not only will you not see a recession, but actually a pick-up in growth,” said George Pearkes, macro strategist at Bespoke Investment Group. “There are going to be days like these.”
Strategists have long been pointing to an unwind of recessionary pricing across asset classes as the end of the end of the world trade.
