Deepening negative real yields in the U.S. Treasury market are fueling a frenetic rally in gold that’s boosting the precious metal toward a record, Bloomberg reported. Bullion has gained 24% this year and is about $45 from an all-time high. With five-year Treasuries now yielding -1.16% once the effects of inflation are stripped out, the lowest close in seven years, there’s little reason to expect a slowdown in precious-metal buying as investors fret about the economic outlook, prospects for further outbreaks of COVID-19 and the impact of central-bank bond buying. With investors looking for safe-haven assets that won’t lose value, they’re pouring record amounts into precious-metal exchange-traded funds. Real yields are also driving investors away from the U.S. dollar, which is currently trading near the lowest since March against a basket of currencies.
