Real Gold Price vs U.S. Real Interest Rate

The real U.S. rate of interest (nominal interest rate minus inflation rate) shows an inverse relationship with gold prices.

When real interest rates are high, gold prices come under pressure. When real rates turn negative (in other words inflation is higher than the interest earned), then gold prices are boosted. The value of monitoring U.S. real yields may become diminished to the extent that gold prices become detached from the U.S. dollar through redenomination into another currency, or global economic activity becoming less shaped by American monetary policy, or both. Consequently, the global real yield is an important supplementary tool for the gold investor.

MineFund’s chart compares inflation adjusted gold prices with real interest rates which show the lowest correlation (R2 = 0.024).

Forecast real interest rates are derived from the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters and the Federal Reserve Bank of Cleveland’s Estimates of Inflation Expectations.

Sources: MineFund Analytics | Bureau of Labor Statistics (BLS), US Deptartment of Labor | Federal Reserve Bank of Philadelphia | Federal Reserve Bank of Cleveland

Although every care has been taken to ensure that this data is accurate, MineFund cannot accept responsibility for sourcing variances, mistakes, errors or omissions or for any action taken in reliance thereon. Use of this data is governed by MineFund's Terms of Service.