“Gold continues to price in a steep $185-200/oz premium to real yields as we see other factors at play that liken this to the 2011 rally in precious metals. JP Morgan’s Economic Data Surprise Index (EDSI) has been tracking lower since late Spring, and although not yet negative as we saw in 2011H1, its downward trend is weighing on the dollar and 10yr nominal yields. They think there remains plenty of room for gold to rally and possibly pick up an even greater premium to real yields as RoW growth starts to outpace the US”
JPM commodity sales desk
