Gold's had a nice run, but any further move higher in price should be capped by rising real interest rates, says Nomura. Previous research has shown a nearly one-to-one negative relationship between the direction in real interest rates and the price of gold. Only a "material change" to U.S. growth expectations or what is thought to be the path of QE tapering could reignite gold's bull market, says the team.
Nomura also notes the deteriorating capital account situation in emerging markets. Money used to defend the currency can't be used to purchase precious metals.
Bankruptcy lawyer humor of the day: "If you're looking for any junior mining CEOs, check my reception area."
Higher earlier, gold is flat on the session at $1,420 per ounce.