The correlation between the US 10-Year Treasury yield (US10Y) and gold prices is historically inverse but has shown periods of divergence due to shifting market dynamics
1. Typical Inverse Relationship
Gold and US10Y yields traditionally move in opposite directions due to:
Opportunity Cost: Higher yields increase the cost of holding non-yielding gold, pressuring prices.
Real Interest Rates: Gold tends to fall when real yields (nominal yield minus inflation) rise, as seen in pre-2024 data.
2. Recent Deviations and Drivers Since 2024, this correlation has weakened or reversed under specific conditions:
Geopolitical Turmoil makes Positive correlation (both rise)us10y and gold ,eg Russia-Ukraine war, Middle East tensions, and U.S.-EU tariffs drove simultaneous surges in yields and gold as dual safe havens.
De-Dollarization,Gold decouples from yields as mejor Central banks (e.g., China, Russia) bought gold aggressively, offsetting yield-driven pressure.
3. Yield Level: US10Y at 4.26%,
Correlation Status: Weakly inverse, but fiscal risks (e.g., U.S. deficit, trade policies) could reignite positive links.
Key Influencers Moving Forward
Fed Policy: Expected rate cuts (2×25 bps in 2025) may weaken yields, boosting gold.
Inflation Expectations: Sticky inflation could sustain gold’s appeal despite yield fluctuations.
Geopolitics: Escalations in trade wars or conflicts may re-tighten the positive correlation.
Summary
While the US10Y-gold correlation remains fundamentally inverse, recent structural shifts—geopolitical stress, fiscal uncertainty, and de-dollarization—have driven periods of alignment.
#dollar #gold
1. Typical Inverse Relationship
Gold and US10Y yields traditionally move in opposite directions due to:
Opportunity Cost: Higher yields increase the cost of holding non-yielding gold, pressuring prices.
Real Interest Rates: Gold tends to fall when real yields (nominal yield minus inflation) rise, as seen in pre-2024 data.
2. Recent Deviations and Drivers Since 2024, this correlation has weakened or reversed under specific conditions:
Geopolitical Turmoil makes Positive correlation (both rise)us10y and gold ,eg Russia-Ukraine war, Middle East tensions, and U.S.-EU tariffs drove simultaneous surges in yields and gold as dual safe havens.
De-Dollarization,Gold decouples from yields as mejor Central banks (e.g., China, Russia) bought gold aggressively, offsetting yield-driven pressure.
3. Yield Level: US10Y at 4.26%,
Correlation Status: Weakly inverse, but fiscal risks (e.g., U.S. deficit, trade policies) could reignite positive links.
Key Influencers Moving Forward
Fed Policy: Expected rate cuts (2×25 bps in 2025) may weaken yields, boosting gold.
Inflation Expectations: Sticky inflation could sustain gold’s appeal despite yield fluctuations.
Geopolitics: Escalations in trade wars or conflicts may re-tighten the positive correlation.
Summary
While the US10Y-gold correlation remains fundamentally inverse, recent structural shifts—geopolitical stress, fiscal uncertainty, and de-dollarization—have driven periods of alignment.
#dollar #gold
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.