Calm Equities Provide Support for Gold Amid Surging Bond Yields

The gold market remains resilient despite persistent inflation pressures and surging bond yields. According to Joy Yang, Global Head of Index Product Management at MarketVector Indexes, the calm equity markets could be providing an important source of support for the precious metal.

Gold prices are currently holding initial support above $4,150 an ounce as 10-year yields trade at a fresh 20-year high of 5.26%. Yang noted that the VIX had recently been around 15 even as bond yields surged, suggesting that equity investors may be somewhat complacent.

Yang suspects that some investors are using gold as a hedge against broader macroeconomic risks, such as elevated inflation and the latest oil-price shock. She pointed out that strong investment flows into gold and Bitcoin exchange-traded funds show that investors continue to see value in alternative assets despite rising bond yields.

Yang argued that this resilience reflects an important shift in how some investors view gold, increasingly holding it as a structural hedge against broader macroeconomic risks rather than competing with bonds on yield. However, she warned that gold is not immune to further selling pressure and could be particularly sensitive to changing interest rate expectations.