The Federal Reserve gave the clearest indication yet that their aggressive tightening cycle is coming to an end, sending the price of gold to new highs.
For nearly 15 years, the relationship between gold prices and real returns on government bonds remained strong. Whenever interest rates rose and real rates on bonds turned positive, the gold price tended to fall. But then something went wrong.
The Federal Reserve gave the clearest indication yet that their aggressive tightening cycle is coming to an end, sending the price of gold to new highs.
For nearly 15 years, the relationship between gold prices and real returns on government bonds remained strong. Whenever interest rates rose and real rates on bonds turned positive, the gold price tended to fall. But then something went wrong.