Gold ETFs Shrink from Record But Demand 'Defies Rising Real Rates'

AI desk brief

Gold retreated to $4,278/oz, a 1-week low, as rising long-end bond yields and the highest real 10-year TIPS yield since Nov. 2008 pressured prices; silver also slipped toward 1-week lows at $64.38/oz, while platinum and palladium fell to $1,749 and $1,257. Brent back above $100/bbl and the move in real rates are the immediate macro headwinds, even as the author argues gold has recently shown a weaker-than-usual inverse relationship to real yields.

World gold ETFs expanded to more than 4,250 tonnes last week for the first time ever, though the top two gold trust funds are down 0.1% since Friday. The piece highlights a 13-week rolling correlation of +0.72 between GLD and 10-year TIPS yields versus a 20-year average of -0.34, with cited bullish structural arguments from AllianceBernstein and Fidelity that central-bank diversification and liquidity concerns are supporting gold despite higher rates.