Bond yields above 5%: why gold is under pressure, and why we are staying patient

What happened on Thursday

Gold fell close to 3% on Thursday and dropped below $3,900 an ounce for the first time since late October, close to its lowest level in a year. Silver fell more than 3% and slipped below $50. The US dollar touched its highest level in about 19 months.

The biggest single move was in the US bond market. The 10-year Treasury yield rose above 5%, a level that has drawn attention from investors around the world. Weekly jobless claims came in slightly higher than expected, but that did little to slow the selling. Oil also rose after the US said it was no longer pursuing a negotiated settlement with Iran, adding to inflation worries.

Taken together, gold is now down several percent this week, after rallying earlier in the month.

Why bond yields matter so much for gold

Gold pays no interest. A US government bond does. When a safe 10-year bond pays more than 5% a year, the cost of holding gold instead goes up. Some investors, especially large funds, move money out of gold and into bonds.

Yields and the dollar move together. Higher US yields attract money into dollars, and a stronger dollar makes gold more expensive for buyers in other currencies.

What matters most is the yield after inflation. Economists call this the real yield. When bond yields rise faster than inflation, gold tends to struggle. When inflation starts to run ahead of bond yields, gold has historically held up much better.

Right now, yields are rising because markets expect the Federal Reserve to raise rates in December, possibly by more than a quarter point. That is a direct headwind for gold in the short term.

Why this does not change our long-term view

High yields cut both ways over time. A 10-year yield above 5% raises borrowing costs for governments, companies and households. The US already carries more than $40 trillion of debt, and higher rates make that debt more expensive to service. Pressure of that kind tends to build slowly and often ends with central banks easing again. Periods after rate hike cycles have historically been supportive for gold.

Meanwhile, the long-term buyers we wrote about earlier this week have not gone away. Central banks are still adding to their reserves, and Indian families bought more gold this Diwali than last year. These buyers do not set the price on any one day, but they shape the trend over years.

What to watch next

Friday 13 November: US producer prices for October. The next inflation reading, out at 8:30 am in New York, which is 7 pm in India. A hot number would add to pressure on yields and gold. A softer one could give both metals some breathing room.

Bond yields. Whether the 10-year yield holds above 5% or eases back will matter more for gold in the coming days than almost any other single number.

The 8 to 9 December Fed meeting. The size of the expected hike is still being debated.

What our AstroPlanetary view says

Our short-term reading is event-based and updates every hour, and a week like this, with an inflation shock followed by a bond-market move, is the kind of stretch where it changes quickly. On the planetary side, November remains the unsettled period we described at the start of the month. Jupiter has just changed sign and turns retrograde in December, and the Rahu–Ketu axis shifts in late November. In our framework that goes with sharp, two-way markets and sudden reversals.

Our long-term view is unchanged. We see gold's next big high in November 2027, with ups and downs along the way. This week has been one of the downs, and there may be more before the year ends.

What we would do this month

On 1 November we said we would stay away from short-term investing in gold and silver this month. This week shows why. A rise of 1.5% on Monday was followed by a fall of close to 3% on Tuesday and another on Thursday. Short-term positions in that kind of market are at the mercy of each new data release. Long-term holders do not need to act on a single week.

Everyone's situation is different. If you are making a decision about your own money, speak to a qualified financial adviser.

Get the day-by-day and longer-term view

The Bullion Signals app gives the short-term forecast updated every hour, the day-by-day view, and the medium and long-term outlook for gold and silver. See the passes, or read our long-term view: the next big high in November 2027.

Sources: US Department of Labor weekly jobless claims; US Treasury yields, dollar and metal prices as reported by Kitco and USAGOLD on 12 November 2026; CME FedWatch.

Educational research, not financial advice. Forecasts and readings are hypothetical model outputs, not guarantees or recommendations, and past results do not indicate future performance.