The Treasury 30-year yield is slightly higher to 2.87% after trading to a 3 month low of 2.84 yesterday. The chart below shows support toward these levels as old high yield levels of 2.84% and 2.85% were reached in March and December ’14 respectively.
The Treasury curve reacts strongly to the employment data, widening the yield spread between 5 and 30 years above a trend line dating to mid-January. This yield spread trades to 122 basis points from a low of 105 bps at mid-month.
Following the Federal Open Market Committee meeting last week, Federal Reserve Chair Janet Yellen made it clear (again) that interest rates would not be raised until inflation gains more steam. It’s a prime example of gold’s Fear Trade, which occurs when investors buy gold out of fear of war or concern over changes in government policy.