Why gold stopped following real yields

For most of the last two decades, gold traded as a fairly clean function of real yields. When real rates rose, holding a non-yielding asset cost more and gold weakened. It worked well enough that it became the default frame for a generation of traders.

That relationship has broken down repeatedly in recent years. Gold has held bids through periods when the old model said it should not, which tells you a different marginal buyer is setting price — one less sensitive to the carry cost.

The practical consequence is not that the model is useless, but that it can no longer be the whole thesis. If your reason for being long is a real-yields view alone, you are exposed to being right about rates and wrong about gold.