Cross-Asset Price-Based Regimes for Gold IntroductionThis article develops a price-based macro–financial model of gold that formally links its medium-horizon return dynamics to cross-asset risk-premium configurations. Although gold has traditionally been conceptualized as a non-yielding inflation hedge or safe-haven asset, contemporary empirical evidence reveals a substantially more intricate structure: gold’s forward returns are systematically conditioned by the joint momentum of (i) gold itself and (ii) l ...

Core Insights - Bond ETFs are experiencing downward pressure as investors prepare for the upcoming FOMC meeting, with the iShares 20+ Year Treasury Bond ETF (TLT) reaching a three-month low despite an 89% probability of a 25 basis point rate cut by the Federal Reserve [1] - The market is more concerned about the Fed's guidance following the potential rate cut rather than the cut itself, with expectations of a pause in rate cuts once the policy rate falls into the 3.5–3.75% range [2] - The concept of a "hawkish cut" is being discussed, where the Fed would lower rates but indicate that further easing is unlikely [3] Bond Market Dynamics - Bond yields and prices are inversely related, with TLT tracking the long end of the curve where yields have increased sharply, with the 30-year Treasury yield around 4.81%, up from October's lows of approximately 4.5% [4] - The long end of the curve is less influenced by the Fed's policy rate, with larger fiscal deficits and changing inflation expectations contributing to the weakness in long bonds, while short-term yields are more responsive to Fed policy [5] - The 10-year Treasury yield has risen to about 4.17%, its highest since September, but remains below January's highs near 4.8% [6] ETF Performance - The iShares 7–10 Year Treasury Bond ETF (IEF) has outperformed both TLT and the iShares 1–3 Year Treasury Bond ETF (SHY), with IEF up 7.8% year-to-date compared to TLT's 4.7% and SHY's 4.6% [7]

Core Insights - U.S.-listed ETFs attracted $147.7 billion in November, marking a significant total despite being lower than October's record of $176 billion. Year-to-date inflows reached $1.27 trillion, setting an annual record with one month remaining [1] - The current pace suggests that net creations for 2025 could exceed $1.4 trillion [1] Inflows by Category - U.S. equity ETFs led the inflows with $73.6 billion, followed by U.S. fixed income ETFs at $33.1 billion, international equity ETFs at $24.6 billion, and international fixed income ETFs at $10.7 billion. Currency ETFs experienced outflows of $3.8 billion, primarily due to cryptocurrency funds [2] Market Performance - The S&P 500 experienced volatility, dropping 5.1% from peak to trough before recovering nearly all losses by month-end, finishing close to its starting point. The 10-year Treasury yield fluctuated, ending the month near 4.08% [3] Cryptocurrency Performance - Bitcoin and ether saw significant declines, with Bitcoin briefly falling to $80,000, approximately one-third below its October all-time high of $125,000 [4] Top Fund Performers - The Vanguard S&P 500 ETF (VOO) led all ETFs with nearly $21 billion in inflows for November, achieving a year-to-date total of almost $125 billion, a new annual record for any ETF [5] - In fixed income, the iShares 0–3 Month Treasury Bond ETF (SGOV) and the iShares 7–10 Year Treasury Bond ETF (IEF) were the top asset gatherers, attracting $5.5 billion and $4.7 billion, respectively. The iShares Core MSCI Emerging Markets ETF (IEMG) led international equity ETFs with $4.6 billion in inflows [6] Top Outflows - The iShares MSCI USA Quality Factor ETF (QUAL), the iShares MBS ETF (MBB), and the iShares Bitcoin Trust (IBIT) experienced the largest outflows, with IBIT losing $2.4 billion and the iShares Ethereum Trust (ETHA) shedding $1.1 billion [7]

Core Viewpoint - Bond ETFs experienced a decline following Federal Reserve Chair Jerome Powell's indication that a rate cut in December is not guaranteed, which contradicted market expectations for a certain move [1][2]. Group 1: Federal Reserve Actions - The Federal Reserve lowered its benchmark federal funds rate by 25 basis points to a target range of 3.75% to 4% [1]. - Powell emphasized that a further reduction in the policy rate at the December meeting is not a foregone conclusion, highlighting differing views within the committee [2]. Group 2: Market Reactions - Following Powell's comments, futures markets reduced expectations for a December rate cut, with the probability dropping to about 66% from around 90% [2]. - Yields surged in response, with the 2-year Treasury yield increasing by 11 basis points to 3.6%, the 10-year yield rising by 9 basis points to 4.07%, and the 30-year yield climbing by 7 basis points to 4.6% [3]. Group 3: Bond ETFs Performance - The iShares 20+ Year Treasury Bond ETF (TLT) fell by 1%, while the iShares 7–10 Year Treasury Bond ETF (IEF) decreased by 0.65% [3]. - The 10-year yield has remained near 4%, reflecting a bounce off this key level as investors processed Powell's remarks [3]. Group 4: Economic Considerations - Powell noted ongoing risks related to inflation and employment, mentioning the government shutdown as a challenge to the Fed's data-driven approach [4]. - Despite Powell's cautious stance, markets anticipate approximately three additional rate cuts between now and mid-2026, with future moves dependent on economic data [5].