News, updated 8 October 2026
Gold and real yields
Why gold tends to fall when inflation-adjusted interest rates rise, how to track real yields, and why the link has weakened in recent years.
A real yield is an interest rate after inflation. If a 10-year US Treasury pays 4.5% and expected inflation is 2.5%, the real yield is about 2%. Traders watch the yield on 10-year TIPS (inflation-protected Treasuries) as the benchmark.
Why gold cares
Gold pays nothing. Holding it means giving up what you could earn elsewhere. When real yields are high, that sacrifice is large and gold is less attractive. When real yields fall, especially below zero, gold’s lack of yield stops mattering, and it tends to rise.
For years this was one of the tightest relationships in finance: gold and real yields moved almost as mirror images.
When it broke
From 2022, real yields rose sharply, yet gold went on to record highs. The main reasons:
- Central bank buying at record levels, especially from emerging markets diversifying away from the dollar.
- Geopolitical risk and sanctions, which increased demand for reserves that can’t be frozen.
- Strong demand in Asia, particularly China.
The link still shows up from day to day, especially around US data and Fed decisions. But it’s no longer the only thing that matters.
Using it
- A sharp rise in yields after US data usually pressures gold in the short term.
- For the longer trend, watch central bank purchases and the dollar alongside yields.