The broken correlation
The historical inverse relationship between gold and ten-year inflation-protected yields weakened materially from 2022 and has not re-established itself. Gold has appreciated through periods when the model implied it should have fallen.
The explanation is compositional. The correlation was built on a market dominated by Western investment flows. Official-sector buyers who are indifferent to carry now set the marginal price in many quarters.
The path from here
If policy easing arrives on the timeline the market currently prices, real yields compress and the traditional relationship works in gold's favour again, with official demand as an additional support rather than the sole one.
The risk case is an inflation reacceleration that delays easing while investment flows stay absent. That combination produced the second-quarter consolidation and could repeat.
Positioning implication
Treat official-sector demand as the floor and the rate path as the accelerator. A portfolio sized on the floor and not on the accelerator survives a delayed easing cycle without being forced out of the position.