Ole Hansen, Head of Commodity Strategy at Saxo Bank, notes that the current market landscape represents a fundamental break from historical norms. Previously, rising real yields—the bond returns adjusted for inflation—consistently pressured non-yielding assets like gold. However, the current cycle shows both gold prices and ETF holdings decoupling from this macro benchmark. Instead of liquidating positions as they did during the 2022–23 rate-hiking cycle, investors are flocking to bullion as a hedge against systemic risk.

This shift suggests that market participants are interpreting high long-term yields as a warning sign regarding fiscal sustainability and mounting government debt. With gold-backed ETF holdings recently reaching a seven-month high, the investor base appears to have broadened. Alongside robust demand from Asian markets and continued central-bank accumulation, this institutional interest remains resilient despite the Federal Reserve’s hawkish stance. Hansen maintains a bullish outlook, arguing that the appeal of gold as an asset outside the traditional financial system is currently overriding the traditional opportunity costs of holding precious metals.