Gold May Rebound Despite Higher Real Yields If Rate Pressures Ease, Jefferies Says

Gold prices stay pressured near $4,000 an ounce amid the US-Israel-Iran conflict that closed the Strait of Hormuz and cut roughly 30% of global oil supply. Markets now price in two Fed rate hikes this year starting in September, lifting real yields such as 10-year TIPS to 2.41% from 1.94% at the start of the year. Jefferies analysts note that the sharp rise in real rates triggered a 25% drop in gold from peaks, yet lessons from 2013, 2018 and 2022 show recoveries once rate pressure later eases. Gold and mining equities have already reset meaningfully, while central bank buying and geopolitics offer support. The firm remains constructive on gold, with Christopher Wood advising investors to start accumulating gold and mining stocks again as the dollar debasement theme persists.