SesTrading · Answers
Gold and interest rates: what the numbers show
Why interest rates matter for gold at all
Gold pays no interest and no dividend. Holding it means giving up what the same money would earn in a bond or a deposit. When that income is high after inflation, holding gold costs more and some investors sell; when it is low or negative, gold costs nothing to hold and looks better. That is why traders watch the real yield: the 10-year US Treasury yield minus the inflation the market expects. On 5 November 2026 the 10-year yield was 4.84%, expected inflation (the 10-year breakeven) about 2.23%, and the real yield on inflation-protected Treasuries 2.60%. So $10,000 in those bonds was paid about $260 a year above inflation; $10,000 in gold was paid nothing.
The Fed’s overnight rate feeds into this, but it is not the same thing. The Fed sets the short end; the 10-year real yield also moves with growth, inflation expectations and how much investors trust the dollar. That difference explains most of the surprises in the numbers below.
Month by month: gold against the real yield
| When the 10-year real yield in a month… | Months | Gold rose | Gold’s median move |
|---|---|---|---|
| Rose | 129 | 45 (34.9%) | -1.1% |
| Fell | 151 | 111 (73.5%) | +2.7% |
| Rose 0.25 points or more | 34 | 10 (29%) | - |
| Fell 0.25 points or more | 29 | 23 (79%) | - |
February 2003 to October 2026 (285 months; in 5 the real yield ended the month unchanged). The correlation of the monthly changes is -0.44: on average, a month in which the real yield rose by one percentage point came with gold about 9.7% lower. Day by day the link is looser but visible: on the 180 days when the real yield jumped 0.10 points or more, gold fell on 121 (67%), median -0.56%; on the 149 days it dropped 0.10 points or more, gold rose on 103 (69%), median +0.63% (5,945 trading days, correlation -0.20).
Gold during every Fed hiking and cutting cycle since 2004
| Cycle (dates the new range took effect) | Fed rate | Gold over the cycle | Gold 12 months after the first move | 10-yr real yield |
|---|---|---|---|---|
| Hikes: 30 Jun 2004 - 29 Jun 2006 | 1.00% → 5.25% | $392.5 → $586.5 (+49.4%) | +11.1% | 2.20% → 2.61% |
| Cuts: 18 Sep 2007 - 16 Dec 2008 | 5.25% → 0-0.25% | $715.8 → $841.7 (+17.6%) | +18.3% | 2.21% → 2.21% |
| Hikes: 17 Dec 2015 - 20 Dec 2018 | 0-0.25% → 2.25-2.50% | $1,078.0 → $1,263.6 (+17.2%) | +5.3% | 0.84% → 1.03% |
| Cuts: 1 Aug 2019 - 16 Mar 2020 | 2.25-2.50% → 0-0.25% | $1,426.1 → $1,485.9 (+4.2%) | +37.6% | 0.26% → 0.00% |
| Hikes: 17 Mar 2022 - 27 Jul 2023 | 0-0.25% → 5.25-5.50% | $1,909.2 → $1,945.7 (+1.9%) | +3.4% | -0.61% → 1.64% |
| Cuts: 19 Sep 2024 - 11 Dec 2025 | 5.25-5.50% → 3.50-3.75% | $2,598.6 → $4,313.0 (+66.0%) | +42.6% | 1.58% → 1.89% |
| Hike: 17 Sep 2026 (so far, to 6 Nov) | 3.50-3.75% → 3.75-4.00% | $4,387.5 → $4,074.9 (-7.1%) | - | 2.68% → 2.60% |
Gold is measured from the close before the first change to the close on the day of the last one. Three lessons. First, gold rose in every complete cycle, hikes included: a hiking cycle usually starts when the economy and inflation are strong, which is not a bad backdrop for gold, and markets price the hikes before they happen. Second, the real yield barely moved in the 2004-06 and 2015-18 cycles even though the Fed rate rose by 4.25 and 2.25 points, which is why gold could rise through them. Third, the one cycle in which the real yield shot up, 2022-23 (+2.25 points), is the one in which gold went nowhere (+1.9% in 16 months, and down 12.1% in the first six months). Cutting cycles were good for gold, but 2007-08 and 2019-20 were also a banking crisis and a pandemic.
The Fed raised its range by 0.25 points on 17 September 2026, its first increase since July 2023. Gold has fallen 7.1% since the day before. The 10-year real yield touched 2.95% on 5 October 2026, its highest since 2008, and was 2.60% on 5 November.
Year by year, 2004-2026
| Year | 10-yr real yield, start → end | Change (points) | Gold, start → end | Gold change |
|---|---|---|---|---|
| 2004 | 2.00 → 1.68 | -0.32 | $415.7 → $437.5 | +5.2% |
| 2005 | 1.68 → 2.06 | +0.38 | $437.5 → $517.1 | +18.2% |
| 2006 | 2.06 → 2.41 | +0.35 | $517.1 → $635.2 | +22.8% |
| 2007 | 2.41 → 1.73 | -0.68 | $635.2 → $834.9 | +31.4% |
| 2008 | 1.73 → 2.14 | +0.41 | $834.9 → $883.6 | +5.8% |
| 2009 | 2.14 → 1.48 | -0.66 | $883.6 → $1,095.2 | +23.9% |
| 2010 | 1.48 → 1.00 | -0.48 | $1,095.2 → $1,421.1 | +29.8% |
| 2011 | 1.00 → -0.07 | -1.07 | $1,421.1 → $1,565.8 | +10.2% |
| 2012 | -0.07 → -0.67 | -0.60 | $1,565.8 → $1,674.8 | +7.0% |
| 2013 | -0.67 → 0.80 | +1.47 | $1,674.8 → $1,201.9 | -28.2% |
| 2014 | 0.80 → 0.49 | -0.31 | $1,201.9 → $1,183.9 | -1.5% |
| 2015 | 0.49 → 0.73 | +0.24 | $1,183.9 → $1,060.3 | -10.4% |
| 2016 | 0.73 → 0.50 | -0.23 | $1,060.3 → $1,150.0 | +8.5% |
| 2017 | 0.50 → 0.44 | -0.06 | $1,150.0 → $1,306.3 | +13.6% |
| 2018 | 0.44 → 0.98 | +0.54 | $1,306.3 → $1,278.3 | -2.1% |
| 2019 | 0.98 → 0.15 | -0.83 | $1,278.3 → $1,519.5 | +18.9% |
| 2020 | 0.15 → -1.06 | -1.21 | $1,519.5 → $1,895.1 | +24.7% |
| 2021 | -1.06 → -1.04 | +0.02 | $1,895.1 → $1,828.6 | -3.5% |
| 2022 | -1.04 → 1.58 | +2.62 | $1,828.6 → $1,826.2 | -0.1% |
| 2023 | 1.58 → 1.72 | +0.14 | $1,826.2 → $2,071.8 | +13.4% |
| 2024 | 1.72 → 2.24 | +0.52 | $2,071.8 → $2,641.0 | +27.5% |
| 2025 | 2.24 → 1.93 | -0.31 | $2,641.0 → $4,341.1 | +64.4% |
| 2026 (to 30 Oct) | 1.93 → 2.60 | +0.67 | $4,341.1 → $3,898.9 | -10.2% |
Year-end values (2026: end of October). In the 12 years the real yield fell, gold rose in 11 (2014 was the exception, -1.5%). In the 11 years it rose, gold fell in 6 and still rose in 5. The biggest one-year jump in the real yield, +2.62 points in 2022, left gold flat; the second biggest, +1.47 in 2013, came with gold’s worst year of the period, -28.2%.
Why the rule bent after 2022
From 2006 to 2021 the level of the real yield and the level of gold moved almost as mirror images (correlation -0.92 on monthly levels). Had that relationship held, a real yield of 2.60% would have gone with gold under $1,000. Instead gold ended October 2026 at $3,898.9 and set its record close of $5,318.4 on 29 January 2026, with the real yield near 2%. From the end of 2021 to October 2026 the real yield rose 3.64 points and gold rose 113%.
The usual explanation is a buyer that does not care about yields: central banks. They bought more than 1,000 tonnes of gold in each of 2022, 2023 and 2024 (1,045 tonnes in 2024), against an average of 473 tonnes a year in 2010-2021, and 863 tonnes in 2025, according to the World Gold Council (2024, 2025). The month-to-month link survived: since 2022 gold still rose in 22 of the 27 months when the real yield fell and in only 12 of the 31 when it rose. What changed is the level. Rates still push gold around; they no longer set where it trades.
How a trader can use this
- Watch the real yield, not just the Fed. A Fed hike that the market expected can leave the 10-year real yield unchanged; a surprise in inflation data can move it 0.10 points in a day, and two-thirds of those days moved gold the other way.
- Mark the event days. Fed decisions, the US consumer price index and the jobs report are the days rate expectations change fastest. Gold’s hourly range is much wider then; size the position for it and keep the stop loss outside normal noise.
- Do not trade the headline alone. “Rates up, sell gold” failed in all three complete hiking cycles since 2004. The chart, the levels and the trend still decide entries; rates are the background. See the gold trading strategy for the session plan.
- Remember the other drivers. The dollar (gold vs the US dollar), inflation (gold adjusted for inflation) and central-bank buying can outweigh rates for years.
Limits: futures prices, month-end values, a single real-yield measure (10-year TIPS, which only starts in 2003), and correlation is not cause. Calculated 8 November 2026.
Key points
- Monthly correlation of gold with the 10-year US real yield, Feb 2003 to Oct 2026: -0.44. Real yield up: gold up 35% of months; real yield down: gold up 74%.
- Gold rose in all three complete Fed hiking cycles since 2004 (+49.4%, +17.2%, +1.9%) and in all three cutting cycles (+17.6%, +4.2%, +66.0%).
- The cycle in which the real yield jumped most (2022-23) was the one gold stalled in.
- Since 2022 the real yield rose from -1.04% to 2.60% while gold more than doubled, with central banks buying 1,000+ tonnes a year in 2022-24.
- On 5 Nov 2026: real yield 2.60%, 10-year yield 4.84%, Fed range 3.75-4.00%; gold $4,074.9 on 6 Nov. Context, not a signal. Trading is risky and most retail accounts lose money.
Related: gold vs the US dollar, gold price adjusted for inflation, gold forecast, gold vs stocks, gold price history, how to trade gold.
Prefer to see gold trades with a plan?
The Telegram bot answers in English, explains the VIP gold trades (each with entry, stop loss and targets) and shows where the weekly results are published, losing trades included. Trading is risky; most retail accounts lose money.
Questions people ask
Does gold go down when interest rates go up?
When real interest rates go up, usually yes: in the 129 months since 2003 when the 10-year US real yield rose, gold rose in only 45 (35%). But when the Fed raises its own rate, not necessarily: gold rose during all three complete Fed hiking cycles since 2004, because those hikes were expected and the real yield barely moved in two of them.
Why does gold go up when interest rates fall?
Gold pays no interest, so the income you give up by holding it shrinks when rates fall, especially rates after inflation. In the 151 months since 2003 when the 10-year real yield fell, gold rose in 111 (74%), with a median monthly gain of 2.7%.
What is the real yield and where is it now?
The yield on 10-year US inflation-protected Treasuries (FRED series DFII10): roughly the 10-year yield minus expected inflation. It was 2.60% on 5 November 2026, after touching 2.95% on 5 October 2026, the highest since 2008.
How did gold do when the Fed raised rates in 2022-2023?
Almost flat. From the day before the first hike (16 March 2022, $1,909.2) to the last (27 July 2023, $1,945.7) gold rose 1.9%, after falling 12.1% in the first six months. The 10-year real yield rose from -0.61% to 1.64% over the same period.
Why did gold rise even though rates were high in 2024-2026?
Central banks bought more than 1,000 tonnes of gold a year in 2022, 2023 and 2024 and 863 tonnes in 2025 (World Gold Council), far above the 2010-2021 average of 473 tonnes. That demand does not depend on yields. Month to month, gold still reacted to changes in the real yield; the level stopped following it.
More answers
- Is SesTrading legit?
- About & licence
- Choosing a gold signals Telegram channel
- Start trading gold with a small amount
- Copy trading vs managed account vs automated strategy
- Investing $50k–$100k for monthly income
- Gold price today (live)
- Lot size calculator (gold and forex)
- What is forex?
- How to trade gold (XAU/USD)
- Gold price history (1970 to today)
- XAU/USD explained
- Pip value calculator
- Trading for beginners: the roadmap
- Margin calculator
- Profit calculator (gold and forex)
- Gold trading strategy: a session-based plan
- Learn trading (free guides and tools)
- How to choose a forex broker (checklist)
- Trading timeframes explained (lesson)
- Common trading mistakes and how to avoid them (lesson)
- Forex trading sessions and kill zones (lesson)
- Market structure: higher highs, lower lows (lesson)
- Candlestick patterns made easy (lesson)
- Support and resistance: levels, ranges, breakout and retest (lesson)
- Fibonacci retracement: levels, discount and premium (lesson)
- Technical analysis for beginners: the tools, in order, with gold measured (lesson)
- Chart patterns: head and shoulders, double top and bottom, triangles (lesson)
- How to backtest a trading strategy, with a real gold backtest (lesson)
- Risk-reward ratio: break-even win rates and what 1:2 and 1:3 did on gold (lesson)
- How to write a trading plan: a filled-in example for gold (lesson)
- Stop loss: where to place it, how to size the trade, and how often gold hit stops of $5 to $100
- Scalping gold: how it works, what it costs, and what 25,416 simulated 5-minute trades showed
- Gold forecast: what 51 years of prices say about the next 12 months, and what they cannot
- Best month to buy gold: what 51 years of monthly prices show (and why it is weak)
- Gold-silver ratio today (78.1) and what 26 years of it show
- Gold vs stocks: how gold behaved when the S&P 500 fell (2000-2026)
- Gold vs the US dollar: what 26 years of the dollar index show
- Gold price adjusted for inflation: 1970-2026 in today’s dollars
- How to use MetaTrader 5: a beginner's walkthrough
- Gold signals: how to read one, our recorded results and what to check