⚖️Inverse Long-End & Spot Gold Correlation Likely to Remain: Cable FX Macro

• While central banks continue to accumulate gold, the rate of new net buying has stabilized relative to macro fund flows. As the immediate geopolitical "panic bid" normalized into a priced-in baseline, classical macroeconomic yield dynamics re-took control of daily price discovery.

• Historically, high real yields, levels above 2.5% in 30YR TIPS, pressure on gold valuations. We can see in the chart below an inverted US 30YR yield (move lower = higher yield) moving as the spot gold price marked a fresh multi-month low last week.

• Spot gold and yields relationship was broken for for most of 2024-2025. Gold prices broke standard valuation models by reaching record highs even as Treasury yields climbed. This was driven by aggressive, price-insensitive central bank reserve accumulation (de-dollarization efforts) and heightened geopolitical risk premiums. 

• As long as long-term real yields stay elevated and fiscal supply keeps long-bond yields high, the inverse correlation between 30-year yields and spot gold will remain the dominant short-to-medium-term driver for precious metals traders.