It's interesting to note that if you look back over the last 40+ years gold has more often than not had a positive correlation with interest rates. However, since the financial crisis with rates in a firm downtrend and gold remaining well supported by easy monetary policy the correlation between the two became firmly negative; negative real yields became the #1 bull case for the yellow metal beginning in 2011.
Something interesting happened recently, yields rose substantially and gold also rose. In fact in the last month gold is up ~$50 and the yield on the 10-year note is up more than 20 basis points:
While this morning's rally above $1300 is impressive there is some big former support in gold near $1310 that should serve to slow down the rally. However, from my estimation the sharp turn higher in the correlation between yields and gold is highly significant. Are we in for a rising rates environment that is also supportive for precious metals?
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