Gold Falls Amid 19-Year High in Treasury Yields
On August 18, 2026, the 30-year Treasury yield hit a 19-year high of 5.33%, but inflation expectations remained steady at 2.3%. Gold prices fell 1.1% to $4,369 an ounce, while silver dropped 2.7% to $64.00. The gold-silver ratio widened from 67.1 on Monday to 68.3.
The July deficit of $432.3 billion was the largest single month since March 2021, and fiscal-year borrowing is nearing $1.8 trillion, already surpassing all of fiscal 2025. Global borrowing costs also reached multidecade highs.
The real yield, not the nominal one, matters to gold prices. The 10-year breakeven rate, or the bond market's inflation forecast for the coming decade, was essentially flat at 2.28% on August 17. Meanwhile, the 10-year real yield reached 2.41% on August 14.
PIMCO found that a 100-basis-point rise in real yields historically costs gold roughly 18% of its inflation-adjusted price. The World Gold Council flags 2.5% as the level where holding gold becomes expensive, and current real yields sit 9 basis points below it.