Bond Yields Hit a 24-Year High. Why Peter Schiff Is Bullish on Gold

Rising Treasury yields are usually bad news for gold. But Peter Schiff argues that the bond sell-off could ultimately become a major catalyst for precious metals.

The 10-year U.S. Treasury yield touched 5.35%, its highest level since 2002, as investors demanded higher returns on government debt. Gold came under pressure, falling nearly $100 an ounce at its session low.

For Schiff, however, the bigger concern is what rising yields reveal about the U.S. government's growing debt burden.

Why Rising Yields Could Be Bullish for Gold

“It's the most bullish thing that could happen to gold and silver because what these rising bond yields show is that bond prices are collapsing,” Schiff told Kitco News.

His argument is that as bond investors face mounting losses, some may look to gold and silver as alternatives. If rising yields also reflect persistent inflation and growing concerns over government debt, the case for holding precious metals could strengthen.

Schiff warned that Washington may eventually struggle to service its debt, raising the risk of what he described as a restructuring that could leave bondholders receiving just “50 cents on the dollar.”

That is a stark forecast, not a certainty. And in the near term, higher yields can still weigh on gold, particularly if they support the U.S. dollar.

Can Gold Reclaim $5,000?

Schiff believes gold could return to $5,000 an ounce faster than many investors expect. He also sees a potential turning point if tighter monetary policy eventually triggers a financial shock.

“They tighten until something breaks, and then they stop,” he said of the Federal Reserve.

If that scenario leads to a policy reversal, lower real yields could give gold fresh support. But if yields and the dollar continue climbing, the metal may face further pressure first.

For XAUUSD, the key question is whether rising yields remain a headwind — or become a warning sign of deeper fiscal and inflation risks that investors increasingly seek to hedge with gold.