Institutions: Gold and Other Precious Metals Frenzy May Trigger Stock and Bond Market Volatility

Odaily News CGS International's Bertram Lai pointed out in a report that the sustained rise in gold and other precious metals could lead to volatility in stock and bond markets. He stated that gold and other precious metals appear to be in a self-reinforcing feedback loop, where their price movements themselves have become news driving price changes. This could affect investors' perception of risks related to fiat currencies and may lead to an expansion of bond risk premiums at the long end of the yield curve. He added that if there is a substantial repricing of bond risk premiums in the coming months, it could trigger a significant fluctuation in stock and credit markets. (Jin10)