Rising U.S. Treasury Yields Influenced by Inflation Expectations, Real Rates, and Term Premiums

On September 1, it was reported that the recent sell-off in U.S. Treasuries has intensified, with the 10-year Treasury yield surpassing 4.75% and the 5-year yield exceeding 4.50%, although the 30-year yield has not reached a new high. Gold prices, which had previously risen in tandem with long-term yields, have now reversed course. Analysts point out that in early August, the 30-year yield rose alongside gold, reflecting market concerns over the long-term purchasing power of the dollar. The current rise in yields is attributed to a combination of increasing medium- to long-term rates, rising real rates, and a strengthening dollar, which exerts pressure on non-yielding assets like gold. The increase in U.S. Treasury yields may involve three different funding drivers: inflation expectations, real rates, and term premiums, which need to be considered when assessing their impact on gold.

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