Apollo chief economist Torsten Slok has found a head-scratcher buried in the financial data: For years, the price of gold and real interest rates have been inversely correlated; as interest rates rise, the price of gold goes down. Now, however, the relationship between the two variables is completely scrambled with no discernable pattern, and Slok sees it as yet another sign investors are getting jittery about the state of the economy.
“Much to the frustration of the quant community, when the Fed started raising interest rates in 2022, the strong correlation between gold and real rates broke down,” Slok wrote in a blog post on Monday.
