Macro Insights Weekly - Gold and geoeconomics

Typically, gold, as a zero-yielding asset, loses value when real rates rise. But in this cycle, gold has kept climbing through high rates. What gives? We see a multiplicity of factors at play.
Between 2007 and 2021, gold was highly correlated with real interest rates.
Since then, the power of real rates to explain movement in gold price has become essentially zero.
Interest in gold runs across retail and institutional, private and public investors.
Inflation and fiscal fears, and USD weaponisation explain rising interest in gold.
Trade war and global security concerns are playing a lasting role as well.