Introduction
Inflation reshapes the value of money. When purchasing power falls, investors look for assets that preserve value—gold is often at the top of the list. Trading inflation effectively requires focusing on real yields and policy response.
Inflation, Real Yields, and Gold
Gold’s performance often inversely correlates with real yields. Rising inflation expectations alongside stable or falling nominal rates drive real yields lower, supporting gold. Conversely, disinflation or rising real yields can cap rallies.
What to Track
Monitor CPI/PCE, breakeven inflation rates, Treasury yields, and central bank tone. Cross‑reference with the dollar index for additional tailwinds/headwinds.
Trading the Regime
Size down during event weeks; expect volatility. Favor pullbacks within strong trends over breakout chases. Map higher‑timeframe levels and predefine scenarios to avoid impulsive decisions.
Position Management
Take partial profits at major levels, trail stops as the trend matures, and review monthly for regime changes. Adapt tactics when inflation dynamics shift.
Conclusion
Inflation is a moving target. By focusing on real yields, policy paths, and levels, you can position intelligently rather than react emotionally.
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