Gold holds bid as real yields rise, breaking a relationship desks trusted
The old hedge is ignoring the textbook.
Senior Markets Correspondent
Bullion and financial charts
LONDON — Gold is supposed to dislike rising real yields. It has not received the memo. Desks said official buying and a persistent geopolitical bid are overpowering the real-rate relationship that structured a decade of commodity textbooks.
That does not make gold a perpetual motion machine. It does make it a worse short for anyone whose only thesis is a 10-year TIPS yield.
Equity cross-asset teams are treating bullion as a third policy variable, alongside the Fed and the dollar. That is a more honest model than the one they retired this quarter.
Elena Vasquez
Senior Markets Correspondent
Covers Treasuries, the dollar, and the policy signals that reprice risk assets.
