Adam Turnquist, Chief Technical Strategist at LPL Financial, notes that the 10-year yield has accelerated its climb, recently hitting 4.97%. Driven by persistent inflation, escalating Middle East tensions, and fiscal anxiety over U.S. debt issuance, the bond market is signaling a move toward levels not seen since 2007. A sustained breakout above 5% could push yields toward the 5.25% to 5.35% range, creating a significant hurdle for bullion.

Despite these headwinds, the historical inverse relationship between gold and Treasury yields has frayed. Investors are increasingly prioritizing currency and fiscal risks over the immediate opportunity cost of holding non-yielding assets. This shift is fueled by strong central bank buying, safe-haven demand, and renewed inflows into physically backed ETFs. According to Turnquist, this divergence highlights that the market is currently more concerned with long-term debasement than with the Federal Reserve’s current interest rate trajectory.