(US 10-Year Real Yield, XAUUSD)
US 10-year real yield is close to all-time lows as 10-year rates flirting with %1.20. Despite the strong negative correlations (5-year weekly correlation is -%94), gold is still flat just below its 233-day moving average (1837). The surging dollar index and possible hawkish FOMC fears are keeping the bullion lower than it should be according to the real yields. Quarterly correlation turns positive for the moment but for the last ten years, it never stays positive for long. If FED will not make a hawkish decision about tapering this week, Gold prices may close the gap with a possible swift move, as long as real yields stay low.