Gold price story is not about a break higher, it's about about sustained profitability: BMO
(Kitco News) Gold's current price action is not about a break higher, it is about sustained profitability, says BMO Capital Markets. "The story on gold from current levels is not about a break higher unless real interest rates go even more negative. Rather, it is about the sustained profitability that maintaining today’s extremely good gold price will bring to gold miners and refiners, providing them with greater optionality on capital management,” writes BMO commodities analyst Colin Hamilton. The correlation to watch is gold and real yields, according Hamilton. “Gold prices have dropped to a two-month low, not coincidentally as real yields pushed to a two-month high. In our view, this remains the key correlation to watch over the coming months for gold prices, particularly amid U.S. election risk,” he says.