Gold pushes toward a record as real yields fall and central banks keep buying
Two drivers, one cyclical and one structural. Only one of them reverses when rates do.
Gold traded above 2,340 dollars an ounce, within reach of its record, after a decline in inflation-adjusted Treasury yields.
Real yields are the cleanest single explanation for the gold price over most periods. Gold pays no income, so the cost of holding it is the real return available on a risk-free alternative. When that falls, gold becomes relatively more attractive without anything about gold itself changing.
The second driver is not cyclical
Central bank buying has run above 1,000 tonnes a year for two consecutive years, roughly double the average of the preceding decade. That is a structural shift in demand and it is not price-sensitive in the way private demand is.
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