Gold’s Negative Yield Drag

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Negative Yielding Bonds vs Gold

November: $8.7T vs. $1225
October: $9.6T vs. $1265
September: $12.4T vs. $1350
Bloomberg data

The market value of the world’s negative-yielding bonds plunged 14 percent last week to $8.7 trillion as investors dumped government debt at a record clip after Donald Trump’s upset win stoked speculation that his ambitious fiscal plan would flood the market with new Treasuries and boost inflation, Bloomberg reported.

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As more bonds on earth move into positive yield territory, the demand for gold drops sharply.  Many investors would rather hold gold than a government bond with negative yield.  The $1.4 trillion decline from Nov. 4 in the total amount of debt certain to lose money if held to maturity was fueled mostly by increased government-bond yields following the U.S. presidential election. The Bloomberg Barclays index of the prices for such debt worldwide fell 3.2 percent last week, the biggest decline since at least 2000, as far back as the data goes.

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