Click to enlarge

Source: Credit Suisse


With gold back under $1600, and the 10 year at 1.87%, I wanted to show a chart of the two of them.

The correlation is not as obvious as most people think: During spikes in Inflation, Gold and Interest Rates tend to run together (see the 1970s or 2001-07).

Post crisis, the period of deflation has continued the rally in bonds that has driven rates to record lows over the past few years. But Gold has been unable to get out of its own way the past few years.

I’ll have the boys run some analytics to see exactly what this correlation looks like back to 1970s . . .


Gold: The Beginning of the End of an Era, February 1, 2013
Credit Suisse

Category: Digital Media, Gold & Precious Metals

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Gold vs 10-Year Yields”

  1. 4X says:

    In the 10 year period between 2001 & 2011 Gold appreciated 659% to trade above $1900 US$/oz. It appears to have been consolidating in the past two years.

  2. RW says:

    Looking forward to what your crew cooks up. The CW about gold for many years was that its price responded inversely to the $USD and/or accelerating change in the general price level (not nominal inflation but rate of change) and that investing in gold miners could leverage your gains from that effect if you chose your companies well.

    As far as I can tell neither has been true for some time and although my sense is that it was true at some point in time it would be interesting to see if that was really the case; if it really was true at all.

  3. Theravadin says:

    My guess is that there is currently a correlation called QE – just a huge amount of $ running around looking for things to invest in, and a significant portion looking for safety/hedges against shocks – treasuries, gold…

  4. jughead says:

    Dear Barry,

    You may find this perspective helpful. I know it has helped me gain an insight into gold.

  5. favjr says:

    The more interesting comparison/correlation is between the real interest rate (on the 10-year or otherwise) and the price of gold. Focussing on the nominal doesn’t make a whole lot of sense actually.