Gold's allure shines brighter amid macroeconomic uncertainties and political risks, capturing headlines as it reaches all-time highs. In this week’s Bond Bulletin we explore the reasoning behind the continued rise in gold prices and its implications for fixed income investors.

What does this mean for fixed income investors?

The ongoing trend of de-globalisation means that fixed income investors must analyse broader markets to gain macroeconomic insights. The decoupling of gold from US 10-year real yields, for example, suggests that bond yields should not be solely considered as the prime indicator for inflation or risk sentiment. This decoupling may encourage fixed income investors to diversify their asset allocation into non-traditional assets, such as commodities or currencies. Through cycles, gold has been a good diversifier to fixed income, with a negative correlation to real yields of approximately 0.36 over the last 20 years.

About the Bond Bulletin

Each week J.P. Morgan Asset Management's Global Fixed Income, Currency and Commodities group reviews key issues for bond investors through the lens of its common Fundamental, Quantitative Valuation and Technical (FQT) research framework.

Our common research language based on Fundamental, Quantitative Valuation and Technical analysis provides a framework for comparing research across fixed income sectors and allows for the global integration of investment ideas.



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