Gold’s Defiance Of Real Yields Can’t Last Unless Trouble Brewing

BY TYLER DURDEN – Zero Hedge

Gold’s surge to record highs is extraordinary – coming as it does in the face of elevated real yields that would normally bring it crashing down. That signals the metal is likely to rapidly reverse this year’s climb, unless risk assets collapse because of an economic or financial crisis.

 The 10-year real yield is still around 2%, a level unseen since 2009.

That should hurt a non-interest-bearing asset like gold, but it isn’t.

The previous two times before the current surge when gold hit record highs were times of negative real yields — during the pandemic and in 2011-12 as Europe’s sovereign debt woes followed on the heels of the global financial crisis.