Bond yields: gold's real rival
What a yield is, and why traders watch it next to the gold price.
A bond yield is the return you get for lending to a government. The US 10-year Treasury yield is the one the world watches. When it rises, safe money earns more. Since gold earns nothing, it has to compete with that return.
Real yields
What matters most is the yield after inflation, known as the real yield. If bonds pay 5% and inflation is 3%, the real yield is 2%. A higher real yield is a stronger rival to gold. A real yield near zero or below makes gold much easier to hold.
This is why you often see gold rise on days when yields fall, even with no gold news at all.