Here's a relationship that doesn't get enough attention: the connection between CPI and gold that runs deeper than just the "inflation hedge" narrative. Gold's relationship with CPI is actually mediated by REAL yields — and understanding this changes how you trade gold around inflation data. Real yield = Nominal yield - Inflation expectations When CPI comes in hot: - Inflation expectations rise - If nominal yields don't rise enough to compensate → real yields FALL → gold RALLIES - But if nominal yields spike to match → real yields stay flat → gold is pressured by the strong dollar This is why gold doesn't always rally on hot CPI — it depends on whether the bond market response is larger or smaller than the inflation surprise. Practical rule: - Hot CPI + yields rise sharply → wait for initial gold spike, then fade it - Hot CPI + yields don't rise much → gold rally is genuine, buy dips - Cool CPI → clear gold positive regardless Do you track real yields (TIPS) when trading gold around CPI releases?