Calm Equity Markets Provide Support for Gold Amid Rising Bond Yields

Gold prices are struggling to hold support as persistent inflation pressures drive bond yields higher and force investors to price in a more aggressive Federal Reserve. However, according to Joy Yang, Global Head of Index Product Management at MarketVector Indexes, unusually calm equity markets could be providing an important source of support for the precious metal.

'I think this resistance from gold kind of reflects also the low volatility in the equity markets,' Yang said, noting that the VIX had recently been around 15 even as bond yields surged. 'On the surface, it feels like equity investors are a bit complacent and the bond vigilantes are going at it.'

Gold prices are holding initial support above $4,150 an ounce as 10-year yields trade at a fresh 20-year high of 5.26%. Meanwhile, the VIX Index is hovering around 17.5 points.