Archive · 17 Nov 2025
Gold Rising With Yields Signals Global Monetary Instability, Says Expert
Imagine your money is like a toy that usually holds its value.
But sometimes, if the grown-ups in charge owe too much money, they might have to print more money, which makes the toy worth less.
Gold is like a special shiny toy that people believe will still be valuable even if other money loses its worth.
Usually, if you can get more money by putting it in a safe place like a government's piggy bank (called bonds), you wouldn't choose the shiny toy.
But right now, the grown-ups owe so much money that even their piggy banks are risky, and they might have to print more cash.
So, even though the piggy banks seem to offer more money (higher yields), people are worried about the overall system and are buying the shiny toy (gold) for safety.
The expert thinks this means the money system is under stress, and it's like a warning light is flashing.
Gold prices are rising above $4,000 per ounce concurrently with US Treasury yields staying above 4%, defying traditional market correlations.
This unusual market dynamic suggests yields are rising due to debt concerns and fiscal stress, not economic strength.
Experts like Jamie Dimon and Ray Dalio acknowledge gold's increasing importance as a hedge against potential currency devaluation and sovereign risk.
Historical patterns show that excessive government debt leads to money printing, devaluing currency and driving investors towards hard assets like gold.
Indian investors are advised to consider allocating 10-15% of their portfolios to gold, preferably through Gold ETFs, as a hedge against global monetary instability impacting the rupee.
- Who
- Ashna Dhuper, Vice-president at Client Associates, and market analysts like Jamie Dimon and Ray Dalio.
- What
- An unusual market phenomenon where gold prices are rising concurrently with elevated US Treasury yields, signaling underlying monetary instability and sovereign risk.
- When
- Recently, as indicated by current market conditions (gold above $4,000/ounce, yields above 4%).
- Where
- Global financial markets, with specific focus on US Treasury yields and gold prices.
- Why
- High yields are attributed to debt concerns and fiscal stress, not economic strength. This, coupled with historical patterns of excessive debt leading to currency devaluation, drives investors to gold as a hedge.
Traditional View of Gold
Expert's Current View on Gold
Purpose of Gold
Traditional View of Gold
Gold is seen as an investment where investors expect returns.
Expert's Current View on Gold
Gold is considered insurance or a hedge against currency debasement and sovereign risk, not for returns.
Market Correlation
Traditional View of Gold
Gold prices typically fall when US Treasury yields rise, as investors move to higher-yielding assets.
Expert's Current View on Gold
Gold prices are rising simultaneously with high US Treasury yields, defying traditional correlations and signaling systemic financial stress.
Investment Strategy
Traditional View of Gold
Focus on traditional investments like stocks and bonds.
Expert's Current View on Gold
Allocate 10-15% of portfolio to gold (ETFs recommended) as a safeguard against global monetary instability.
- Expert
- Ashna Dhuper, VP at Client Associates (multi-family office and private wealth management firm)
- Key Observation
- Gold prices are breaking above $4,000 per ounce while US Treasury yields remain above 4%.
- Traditional Correlation Breakdown
- Gold usually falls when yields rise, but they are rising together now.
- Reason for Yields
- Yields are rising due to debt concerns and fiscal stress, not economic strength.
- Gold as Hedge
- Gold is viewed as protection against future money-printing and rising sovereign risk.
- US Debt Situation
- US debt is $38 trillion with a debt-to-revenue ratio of 790%.
- Recommended Investment
- Allocate 10-15% of portfolio to gold, preferably via Gold ETFs.