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What are the implications for gold as yields converge?
A lot has been made of the convergence of yields for cash, bonds and equities (on an earnings yield basis), with the higher yield on offer in the cash space leading many investors to reassess their portfolio exposures (Chart 1). In fact, with cash yields offering compelling reward with little risk and with the balance of economic forces still appearing to be tilted against global capital markets, investors have been rushing into cash over recent months. And after years of unattractive yields, it is of course a welcome change to get some interest on defensive positions. That, however, is different to saying that ... (full story)