Gold prices made significant moves today, nearing record highs in the UK as government borrowing costs surged. The price of gold in Pounds reached £2162 per ounce, just £5 shy of its all-time high. This comes as the Pound weakened following a disappointing auction of UK government debt yesterday.
US Dollar and Euro gold prices also climbed, with bullion hitting $2664 per ounce – a level tested six times in the past month – and reaching €2589, close to mid-November’s record.
In the bond markets, UK 30-year Gilt yields soared to 5.45%, their highest level since 1998. This jump reflects investor concerns over inflation and rising deficits, with market chatter pointing to so-called "bond vigilantes" pushing back against Labour’s fiscal policies.
Borrowing costs also rose elsewhere, with US 30-year Treasury yields nearing 5% and German Bunds hitting 2.5%. Stock markets fell globally, while energy prices rose as winter storms gripped parts of the US, and European natural gas remained high amid a cold snap.
Today’s mixed economic data paints a complex picture: US job openings rose unexpectedly, but private sector hiring slowed in December. In contrast, China's economic struggles continue, with falling borrowing costs sparking fears of stagnation similar to Japan’s "lost decades."
Gold’s rise, in tandem with rising yields, suggests heightened investor caution as markets digest these developments. Will we see gold break its UK record soon?
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