Gold prices are up slightly in early U.S. trading Monday. The opening session of Q3 sees subdued market activity as the U.S. enters a short trading week due to the holiday. Gold is trading at $2332.51, up $5.76. Silver is trading at $29.40, up 26 cents. According to Richard Mills in his article “Why Is the Dollar Rising as Treasury Yields Fall?” on GoldSeek, the strengthening of the US dollar despite falling Treasury yields is an unusual economic phenomenon. Typically, the dollar and US bond yields rise and fall together. However, the US dollar index (DXY) has increased to over 105 due to its safe haven status amid global conflicts and high interest rates. Meanwhile, Treasury yields have declined, with the 10-year yield dropping from 4.70% in April to 4.25% in June. Mills attributes this to the US government’s rising debt and reduced foreign purchases of Treasuries by countries like China, India, and Brazil. Conversely, Western countries and financial centers have increased their Treasury holdings, supporting the dollar. He suggests a possible coordinated effort by US allies to prevent a massive sell-off of Treasuries, which could lead to significant inflation.
