How Bond Yields and the Dollar Affect Gold Prices

Publisher’s Note: Please find an excerpt below from the last weekly issue of Family Office Advantage. It’s a window into my current thoughts on the macro market, including treasuries, the dollar, and gold. Members receive these issues every week, along with specific recommendations to capitalize on the current environment. Learn more about Family Office Advantage here


After surging higher for most of the year amid a historic “bond crash,” the US 10-year yield has been declining since May 9. 

While the Fed is keen on raising in the short-term, Mr. Market is showing their impotence on longer durations. 

I have been calling for bond yields to fall despite hawks buzzing around for the past few months. 

Graph of US 10-year yield showing decline

A chart of the dollar looks similar with the DXY peaking for the short-term just a week later. I say short-term because, unlike yields, which I expect to fall further as the bear continues to scare the herd, the dollar should strengthen once again for the same reason. 

A chart of the US dollar index

For now, softer yields and dollars have been good for gold, which is the mirror image of those charts. It’s up from $1,785 in the middle of the month to $1,850 today. 

Graph of Gold Prices

The gold price has now outperformed a basket of gold miners for the past one month, three months, and six months. 

Gold stocks, then, will have some catching up to do once the bear vacates the area. 

And speaking of bears, the S&P 500 officially fell into one last week, notching 20% downside since the start of the year. A short-term relief rally is underway, but this bear is just waking up and still hungry. 

I see more downside ahead for the remainder of the quarter and into next, given the Q2 earnings comparisons are going to be even more grim than Q1’s. 

It is still time to sell the rips — not to buy the dips.

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