Gold to continue drawing strength from negative US real yields

  • Negative US 10-year real yields power gains in gold. 
  • The yellow metal is a hedge against inflation.

Gold, a zero-yielding safe-haven metal, has gained 17% so far this year. 

The negative real or inflation-adjusted US Treasury yields seem to have power gains in the yellow metal and could continue to support the uptrend in the near term, according to Holger Zschapitz, senior editor at the economic and financial desk of the German daily Die Welt. 

As seen above, gold has rallied from $1,450 to $1,789 over the past three months, while the US 10-year real rates have declined from 0.60% to -0.73%. Negative real yields essentially represent inflation or a decline in purchasing power and gold is a hedge against inflation.

Real rates could slide further, as the Federal Reserve is unlikely to halt treasury purchases anytime soon. As such, gold could continue to gain altitude and may test the $2,000 mark in the next 12 months, as forecasted by Goldman Sachs. 

At press time, gold is trading at $1,775, representing a 0.10% gain on the day. Price hit an eight-year high of $1,789.15 on July 1. 

Technical levels


Today last price 1775.76
Today Daily Change 0.43
Today Daily Change % 0.10
Today daily open 1776.19
Daily SMA20 1747.5
Daily SMA50 1728.5
Daily SMA100 1678.16
Daily SMA200 1593.25
Previous Daily High 1777.21
Previous Daily Low 1772.76
Previous Weekly High 1789.28
Previous Weekly Low 1757.7
Previous Monthly High 1785.91
Previous Monthly Low 1670.76
Daily Fibonacci 38.2% 1775.51
Daily Fibonacci 61.8% 1774.46
Daily Pivot Point S1 1773.56
Daily Pivot Point S2 1770.94
Daily Pivot Point S3 1769.11
Daily Pivot Point R1 1778.01
Daily Pivot Point R2 1779.84
Daily Pivot Point R3 1782.46



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD loses 1.1800 amid escalaing US-Sino tensions

EUR/USD dips sub-18 after the US reported an increase of 1.763 million jobs in July, better than estimated but pointing to a deceleration. Escalating Sino-American tensions are boosting the dollar and fiscal talks are eyed. 


GBP/USD resumes decline, weighed by UK concerns, US-China conflict

GBP/USD trades at fresh weekly lows below 1.3050 as the dollar got a sudden boost from mounting tensions between the world's two largest economies. UK Chancellor Rishi Sunak said the furlough scheme that is underpinning the economy cannot last forever.


Gold: Meteoric rally falters, closes the week below $2050

Dollar comeback poured cold water on gold’s record-breaking rally. US-China woes, US stimulus deadlock and upbeat NFP boosted the USD. The focus stays on US-China trade talks amid light US docket next week.

Gold News

Bitcoin may extend the recovery once Gold resumes the rally

Gold retreated from the recent highs, but the sentiments are still bullish. Cryptocurrencies resumed the upside, some altcoins are demonstrating strong gains. ETH/BTC stopped the downside correction and settled at $0.03300.

Read more

WTI extends slide toward $41, on track to post weekly gains

Crude oil prices continued to fall on Friday and the barrel of West Texas Intermediate (WTI) touched a daily low of $41.05 before recovering modestly.

Oil News