Key points
- Pays no interest, so it competes with the real yield on bonds.
- Has acted as a safe haven in many crises.
- Historically moved opposite to real yields, though the link weakened after 2022 as central banks bought heavily.
Example
A drop in 10Y real yields from 1.5% to 0.5% often supports a 5–10% gold move higher if USD is stable.
In history
Gold rose from about $1,450 in 2019 to over $2,000 in 2020 as real yields turned negative. From 2023 it more than doubled to record highs above $4,000, even with real yields around 2%, helped by heavy central bank buying.
Related terms