Gold Capped at $4,000 as Real Yields Rise, but Jefferies Eyes Recovery if Rate Pressure Eases

According to Jefferies analysts, gold prices have remained constrained at $4,000 an ounce amid elevated real yields, which have increased the opportunity cost of holding the non-yielding asset. The 10-year TIPS real yield has risen to 2.41%, compared to 1.94% at the start of 2026, driven by market expectations for rate hikes following the U.S.-Iran conflict and subsequent energy crisis. Gold has declined approximately 25% from peak levels since early 2026 when rate expectations shifted from potential cuts to potential hikes.

However, Jefferies remains relatively optimistic for gold recovery as real-rate pressure may subside. The firm notes that central bank buying, geopolitical uncertainty, and de-dollarization continue to support gold prices. According to Christopher Wood, Global Head of Equity Strategy at Jefferies, investors should start accumulating gold and gold mining stocks, as the U.S. dollar debasement trade remains in effect.