Gold Falls To $3,600 If Yields Do THIS Next | Nicky Shiels

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Nicky Shiels (1:27)

The only way out is currency or fear debasement. Gold should still outperform the USD and real yields. Gold is still sitting at $840 premium above fair value, but that $840 is still on a local level during a Trump era, is still on the lows. And that's what we call sort of the debasement or fear premium that we think gold should continue to hold.

David Lin (1:52)

We're back now to talk about the future of gold and precious metals with Nicky Shiels, head of research and metals strategy at Mks Pamp. Nicky was on the show several times in the last year. We'll put the links down below so you can check out her last interview with me. Nicky, good to have you back. Thanks for joining.

Nicky Shiels (2:07)

Yeah, great to be back. Thanks. Thanks. Great to be back.

David Lin (2:10)

The biggest question I think a lot of gold investors have right now is whether or not the metal was going to survive a higher interest rate environment. By survive, I mean maintain current levels, if not retrace back to pre-2026 levels before the massive run up that gold has experienced in the last year. Right now, we're sitting at just over $4,100 and announced. And the 10-year and 30-year yields, as you know, have been rising. They continue to rise even today on the 30th of September. Many economists have believed that this is a symptom of higher oil prices. So what is the relationship between interest rates and gold? Let's start there.

Nicky Shiels (2:50)

I mean, it's a great question. Gold has had a tumultuous relationship with interest rates over time. Historically, it is inversely correlated with higher interest rates, especially higher real interest rates.

But since 2022, that correlation has sort of weakened somewhat, again, because central banks and physical buyers entered the space. And so what you're seeing right now is sort of a re-correlation because you've got the sort of vicious cycle of high, longer oil branches comfortably above 100 There's sort of a crisis confidence in bonds with sell off across not just the US but other fixed income asset classes and leading to higher yields. And so yes, we have seen gold reverse locally from a $45 dollar high recently to now it's $4,100. So it really is contending with a higher dollar environment, tactically a higher yield environment. So there's substantial headwinds being thrown at gold.

But I think we nearer the end on the short-term basis. If you just look at what's happened this week, yesterday we had weaker US data, consumer confidence, Stoltz numbers. You then had the New York Fair President Williams come out with some pretty dovish remarks.

I think both the rates dollar and dollar market are trying to price in a series of hiking cycles, both in 2026 and 2027 I think that's a little too aggressive. And I think, and again, technically on the charts, US dollar just seems to be up at that resistance level. It's failed at several times before. So gold's holding in. It's holding in where it should be at near support, around 4,000. The structural bullish long-term drivers, debasement, de-dollarization, diversification against other assets hasn't gone away. Central banks continue to add, so do ETFs, and so do sort of the investors who are no longer, who aren't long gold, are allocating to the space. Okay.