Gold Hits $4,000 – a clear signal!
Gold continues to prove its role as the ultimate store of value amid falling real yields and persistent geopolitical uncertainty.
Breaking above $4,000/oz marks not just a psychological milestone but a structural shift — as central banks increasingly explore holding both gold and Bitcoin as strategic reserves.
- Historic rally: up over +50% since end-2024, with gold now above $4,000/oz — on track for its strongest year since 1979
- Macro drivers: lower Treasury yields, U.S. fiscal tensions (shutdown), and geopolitical risks fuel safe-haven demand
- Institutional demand: central banks remain net buyers
- Evolving narrative: gold retains its status as ultimate store of value, while Bitcoin emerges in discussions as its digital counterpart in an increasingly fragmented monetary system
Yen Carry Trade Back on Radar
Japan’s currency has dropped against its G-10 peers as investors wagered that Sanae Takaichi’s pro-stimulus stance would result in a slower timeline for the Bank of Japan’s policy tightening
- A slower timeline for interest-rate hikes could tempt traders back into the yen carry trade, where they borrow the low-yielding yen and buy currencies that offer higher returns
- The yen’s weakness may sustain the appeal of carry trades, if Takaichi continues to argue that a weak yen will not pose negative issues for Japan’s economy
Trump Opens Door to Talks
President Donald Trump showed signs of cracking, sending mixed messages about the state of talks with Democrats on their biggest demand, which is related to health care subsidies
- Trump said he was open to negotiating with Democrats over health care subsidies to bring an end to the funding stalemate, but later seemed to retreat
- The shutdown has closed the government outside of essential services, left hundreds of thousands of Americans without pay and limited access to government services
- Lawmakers may feel more pressure as federal workers begin to miss pay on Oct. 10 and the military on Oct. 15
- Democrats say any measure to reopen the government must address Affordable Care Act subsidies that are set to expire at the end of 2025, as well as cuts to Medicaid implemented through Trump’s signature second-term spending law
French Turmoil Deepens
Freshly nominated French PM Sebastien Lecornu unexpectedly quit early Monday blaming intransigence of political groups for their failure to agree to a new cabinet
- President Emmanuel Macron asked Lecornu to remain caretaker for 48 hours and attempt negotiations with political parties in hopes of finding a stable governing majority
- For various political parties the only solution to the crisis is for Macron to resign or for him to call legislative elections
- The latest collapse means government will struggle to meet October 13th deadline to file a budget – this could bring emergency measures to be taken in January to avoid a shutdown
- France’s spread over Germany rose to 86bp, highest since early January – before last spring’s elections the gap was 43bp
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