Treasury yield un-inversion signals recession risk as gold hits record $4,781 per ounce

Gold is trading at $4,781 per ounce, a $1,551 increase from one year ago. The price has risen more than 25% since early 2025, driven by inflation and economic uncertainty.

This surge comes as the U.S. Treasury yield curve returns to a normal upward slope. The spread between 10-year and 2-year bonds is 0.52 percentage points, with the 10-year rate now higher. This state, known as an un-inversion, occurs when short-term interest rates begin to fall.

Since 1970, every recession has been preceded by such an un-inversion. The current signal mirrors patterns seen before the 2020 pandemic recession, the 2008 Great Recession, the 2001 dot-com bubble, and the 1990 recession.

While traditional stocks averaged 10.7% annual returns from 1971 to 2024 compared to gold's 7.9%, investors often shift to gold as a store of value during periods of volatility. Many execute this through exchange-traded funds (ETFs) to avoid the storage costs and variable spreads associated with physical bullion.