Jeffrey Gundlach on Rising Long-Term Rates, Gold, and Commodities

Global Rise in Long-Term Interest Rates

• 📈 Long-term interest rates have been rising globally, not just in the US, indicating a potential lack of trust in how finances are being managed.
• ⚠️ A significant portion of US Treasury issuance over the past 12 months has been in T-bills, with a surprisingly small fraction in long-term bonds, yet long-term rates are increasing.
• 🌎 This phenomenon is observed across developed countries, including the UK, Japan, and Germany, suggesting a global financial concern.

Gold and Silver Performance

• 🥇 Gold has seen a remarkable return this year, reflecting investor concerns.
• 🥈 Silver has outperformed gold, with gains exceeding 100%, which is viewed as a speculative frenzy and a potentially negative sign for future financial stability.

Commodities and Inflation

• 📊 The Bloomberg Commodity Index has been rising, with its 200-day moving average also trending upwards, signaling a positive turn.
• 💡 For the first time in a long time, commodities broadly are now viewed positively, with a commodity index making sense in a portfolio.
• 🛢️ Crude oil is noted as an exception, not currently inflating, which is positive for the inflation side of the Federal Reserve's dual mandate.
• 📉 The oil futures curve suggests prices may remain in the high $50s for the next 12 months, a rare forecast of stability.