Gold, Silver Defy Odds as Treasury Yields Surge to Near-Historical Highs

Gold and silver have shown remarkable resilience in recent weeks despite an environment that historically would be challenging for them. The precious metals complex has managed to withstand a significant increase in US Treasury yields, particularly at the front end of the curve, as well as a hawkish Federal Reserve and a sharp rebound in the US dollar.

The surge in US two-year yields ranks near the 95th percentile since 1976, with five-year yields up 30.2 basis points and ten-year yields rising by 21.2 basis points. In contrast, gold rose 0.68% over the past week while silver climbed 2.76%, defying historical trends that suggest a decline in these situations.

The recent performance of gold and silver has been influenced by unusual cross-asset relationships, with their correlations to Nasdaq futures rising towards historical extremes. The dominant macro environment may be driving this relationship rather than any fundamental link between precious metals and technology stocks.