Why Rising Bond Yields Could Break the Market — And What It Means for Gold

Estimated reading time: 6 minutes

Weekly Price Overview – 28 May 2025

Gold and silver prices edged higher again this week — holding key support levels and continuing their longer-term uptrends.

🟡 NZD gold gained $14 to $5,575, pausing just below short-term resistance but still trending upward overall. USD gold rose $21 (0.6%) to $3,292 and remains in its rising channel, though short-term resistance has capped further gains for now.

⚪ Silver showed modest strength. NZD silver ticked up $0.05 to $56.06, hovering at its 50-day moving average. USD silver added $0.15 to $33.31, remaining above key support with dip-buying interest evident.

💱 The NZD strengthened slightly (+0.37%) to 0.5942, closing just above its 200-day moving average — a sign the Kiwi may be building for a longer-term breakout higher.

📊 Charts show gold and silver remain in solid uptrends, and any dips from here could offer another buying opportunity, especially as debt concerns and rising bond yields dominate headlines.

Is a Gold Market Shock Brewing?

The European Central Bank (ECB) just quietly flagged €1 trillion in gold derivatives exposure — and admitted it could trigger broader financial stress. Add in a 718% spike in COMEX gold deliveries, and it’s clear: demand for physical metal is rising fast.

This week’s feature article shows that even the ECB is advising to “Hold the metal, not the promise”. Read the full article.

Why Rising Bond Yields = Falling Asset Prices

A month ago, we wrote about how the world is losing faith in US Treasuries — and turning to gold.
In case you missed it: Why US Treasuries vs Gold is the Battle of This Decade

We said we’ve entered a new era of rising rates — after nearly 40 years of falling yields.
Now, the bond market is proving us right — and it’s moving fast.

Trouble in Japan’s Bond Market Could Be Contagious

Stan Roberts at ITM Trading highlights a dramatic move this week:
The 30-year Japanese Government Bond yield has surged above 3%, higher than it was in the year 2000.

Source: Wolfstreet

Why do Japanese bond markets matter to anyone else?

Because Japanese investors are the largest holders of US Treasuries — with over $1.13 trillion in exposure.

As Ritesh Jain warns:

“Rising Japanese bond yields could be very bad news for Western bond markets.”

More on why this is shortly…

US Treasury Yields: On the Edge of Something Bigger?

Meanwhile, in the US:

• The 30-year Treasury yield has pushed above 5%
• The 10-year yield is flirting with a technical breakout above 4.71%

If that level gives way, says Jacques Mechelany of Maxin Advisors:

We could see a surge toward 6.5% or even 7.8% — triggering a fundamental repricing of global assets.

That means:

• Real estate pressure via higher mortgage rates
• Falling equity valuations as P/E ratios compress
• A sharp drop in asset prices triggering a negative wealth effect

And it’s all happening while inflation remains sticky — especially in Japan, where pressure is building on the BOJ to raise rates.

The US Is Closer to Yield Curve Control Than Japan

Tavi Costa warns:

“The U.S. simply can’t afford to keep rates this high.”

Back in the 1940s, with similar debt levels, U.S. interest rates were held at 0.4%. Today, they’re over 4.3% — and climbing.

Plus today:

• 🇯🇵 The Bank of Japan owns 50% of its debt
• 🇺🇸 The Fed holds just 14% — its lowest share in years
• 🇺🇸 The U.S. spends nearly 5% of GDP on interest (vs Japan’s 0.9%)
• 🇯🇵 Japan’s debt is long-dated (9 years avg)
• 🇺🇸 U.S. debt rolls over faster, so higher rates hit harder

With debt costs soaring, the Fed may soon be forced to act — using Yield Curve Control or more QE to suppress rates again.

The Debt Contagion Is Spreading

Brandon D. White puts it bluntly:

If Japan’s bond yields rise further, Japanese institutions may pull capital from the US to invest at home. That withdrawal could create liquidity problems in US markets, and cascade into global instability.

He compares today’s system to a hospice ward full of terminally indebted nations:

“Washington and Tokyo are just two sick patients in an entire hospice unit. Once the plague of government debt has run its course, and the tombstones of irresponsible lenders and borrowers have been chiseled, then (and only then) will the world return to a healthy equilibrium. Until then, there is gold.”

What Does This Mean for You?

• Government bonds were once considered risk-free
• Today, they’re volatile, inflation-eroded, and vulnerable to capital flight
• In contrast, gold (and silver) are nobody’s liability — and as debt loses its “safe haven” status, gold’s role only grows stronger

Meme of the Week: Cardboard Armour?

Source: Lobo Tiggre

Clever meme — But when things get violent in the markets, don’t get caught wearing cardboard armour!

📞 Talk to us today or learn more about how to buy gold and silver before rising bond yields trigger falling asset prices — and expose how little real protection most portfolios actually have: