What’s Behind the ‘Trust Crisis’ in U.S. Treasury Bonds? Gold May Face Its Biggest Transformation in a Decade.

On Tuesday (September 30), the US Treasury bond and spot gold markets were at a highly sensitive juncture. Over the past 24 hours, the risk of a US government shutdown dominated discussions on trading desks, with probabilities climbing to 54%-58%. Negotiations at the White House ended in failure, making a shutdown almost inevitable after midnight. This could delay the release of September’s employment report, thereby obscuring the Federal Reserve’s policy trajectory, while directly unsettling the interplay between the bond market and precious metals. The 10-year Treasury yield currently stands at 4.127%, consolidating slightly during the day, while spot gold touched a record high of $3,848 per ounce before retreating to around $3,815.56 per ounce. Against the backdrop of a weakening US Dollar Index, signs of havens shifting from bonds to gold have become increasingly evident, testing traders’ sensitivity to structural imbalances….