The Emperor Has No Clothes: UST Market Is Breaking Down | Andy Schectman

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Andy Schectman says the U.S. Treasury market is showing signs of breakdown, with intervention and yield suppression undermining price discovery and accelerating a move toward gold. He argues that foreign holders, including Japan and China, are reducing reliance on Treasuries and dollars while increasing gold exposure, with China’s gold buying reportedly far above official figures. The piece ties this backdrop to a more inflationary policy mix: suppressing rates while expanding money supply, which Schectman says would pressure savers and fixed-income holders and reinforce safe-haven demand for bullion. He also cites Goldman Sachs’ $4,900/oz gold target as having upside risk and points to more than $22bn flowing into gold futures in just three weeks as evidence of strong speculative and institutional interest. For metals traders, the message is broadly bullish for gold near term if Treasury-market stress persists and real-yield suppression continues. The main catalyst remains confidence in U.S. fiscal/monetary credibility versus continued reserve diversification by foreign holders; any further acceleration in futures inflows or central-bank buying would reinforce the bid, while a stabilization in yields or dollar strength could temper momentum.