Gold Defies Rising Yields with Resilient Premium
Gold's price has remained above $4,000 an ounce despite a recent surge in US Treasury yields. This resilience suggests that the premium for gold is proving more durable than expected and setting the stage for further gains once the US Federal Reserve's tightening cycle ends.
The relationship between gold and interest rates changed after Western sanctions froze roughly half of Russia's official reserves, causing central banks to diversify their reserves away from dollar assets. This shift has resulted in a structurally higher premium driven by reserve diversification and geopolitical hedging, which is not captured by the real-yield framework.
Nicky Shiels, metals strategist at MKS PAMP, estimates that this premium, also known as 'debasement and de-dollarisation', has risen from about $120 an ounce before 2022 to an average of more than $1,000 since then. Currently, it stands at roughly $840 an ounce.
Analysts say that gold is being boosted by demand driven by safe-haven concerns, with trade data showing that China imported 1,077 metric tons of gold in the first eight months of 2026, suggesting annualised imports are on track for the highest in 11 years. Additionally, Poland's central bank has continued to add to its reserves.