UBP’s Kinsella: US Treasury Gold Revaluation May Restart Debasement Trade as Yield Pressures Ease

Peter Kinsella of UBP believes gold has likely seen the worst of its Treasury-yield-driven losses. Once tensions in Iran ease and Fed rate hike expectations soften, a revaluation of the US Treasury’s gold holdings could deliver fresh support for prices by year-end. Kinsella pointed out that gold’s decline since the September 25-basis-point hike remained modest even as 10-year yields reached 5.30% and real yields approached 3%. Investors kept adding to ETF positions and futures longs, showing little sensitivity to the rate surge and indicating fading correlations. Central banks including China continue buying, backed by a record 45% of institutions expecting to raise holdings. Overstated rate hike bets leave room for a Treasury revaluation of over 8,000 tons that could devalue the dollar and restart the 2025 debasement trade. Spot gold fell to $4,079.42 per ounce after hotter CPI data.