Schiff Predicts Rising Bond Yields Will Fuel Gold Demand

Economist Peter Schiff argues that rising bond yields will drive more money into gold, rather than competing with it. He believes investors are misreading market dynamics and that inflation erodes the real value of fixed-income investments.

The 30-year U.S. Treasury yield briefly hit a 19-year high of 5.323% on August 19th, but gold prices rebounded to $4,367 after weak July jobs data showed the U.S. economy lost 23,000 jobs versus expectations for an 85,000 gain.

SPDR Gold Shares attracted $1.78 billion in monthly inflows, and technical indicators show potential signs of a bottom near $3,940. Schiff notes that traders selling gold due to higher yields are focusing on the wrong aspect, as rising bond yields will actually drive more money into gold.