Gold Likely To Face Pressure If Yields Rise
The charts below show an interesting relationship between gold and bonds. The top chart is XAUUSD, the middle chart is IEF - iShares 7-10yr Bond ETF, and the bottom chart is the US 10 Yr. Treasury yield. The red trendline shows the period between the third quarter of 2018 to the middle of 2020. During this period, gold and bond prices both appreciated, whilst yields declined. The orange trendline represents the period from the second half of 2020 to the first quarter of 2021. This period is characterised by falling gold and bond prices, and higher yields. The green trendline defines the period from the beginning of the second quarter of 2021 until the present. Here, gold and bonds show a slight appreciation and yields a slight depreciation. These three time periods define a positive relationship between gold and bond prices and an inverse relationship between the precious metal and bond yields. Given the hawkish tone of the Fed's minutes for December, the odds favour a rise in yields. This being the case, and given the identified relationships, XAUUSD very well come under pressure.
Source: www.tradingview.com
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Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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