He explains that current market pricing suggests expectations of a Republican victory in upcoming elections, which has driven US Treasury 10-year yields above 4.3%.
With yields now near resistance levels, he views this as an appealing time for investors to “average in” and secure high returns, anticipating yields will decline over time.
The strategist also sees strong potential in gold as part of a diversified portfolio, maintaining an overweight view on the asset.
He explains that gold’s role as a hedge becomes especially valuable if inflation rises. While geopolitical tensions have eased recently, any renewed instability would also further enhance gold’s value as a protective asset.
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Yap, however, remains cautiously optimistic on US equities. He believes that if the US can avoid a recession, continued economic growth and solid earnings should support the stock market.
While eventual rate cuts from the Federal Reserve could help sustain growth momentum, he sees bonds as the more attractive entry point for now, given their elevated yields and potential for future gains.
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