The downward trend of real interest rate in 2020 can be divided into two stages. In the first half of this year, the Federal Reserve lowered the nominal interest rate. Because of the global epidemic in March, the global economy was frozen, the financial market was deleveraging, and the liquidity of the US stock market was lost, so it fell to the melting point as soon as it opened. For the Fed, the main contradiction at this time is to solve the liquidity crisis in the financial market caused by the epidemic. Therefore, the Fed quickly expanded its table and reduced the yield of 10-year US bonds from the lowest 1.8% at the beginning of the year to below 0.6%.

2. However, in the second half of 2020, the decline of real interest rate was mainly due to the rebound of inflation expectations brought about by the return to normalization of the economy, because the financial stimulus gave money to the residential sector, but everyone's panic about the epidemic subsided and normal economic activities resumed. Therefore, although the nominal interest rate is still rising at this stage, inflation expectations are higher due to the improvement of the economy.

3. It should be noted that the downward trend of real interest rate has changed recently. The real interest rate of 5-year US debt is still falling, but the real interest rate of 10-year US debt has started to rise.

4. This is the source of downward pressure on gold! Because the nominal yield of US debt rose too fast, the downward trend of real interest rate was blocked.

5. Although the market has further expectations for the expansion of the follow-up fiscal stimulus in the United States, logically speaking, the fiscal stimulus in the United States means that inflation expectations will continue to rise, but the market only recognizes inflation expectations in the short term, which will lead to a decline in the real interest rate, so the real interest rate of five-year US debt will fall.

6. In the medium term, even if the fiscal stimulus is expected to escalate, the probability of the Fed's monetary policy returning to normalization will be further increased compared with the upward trend of inflation expectations, and the driving force for the upward trend of US bond yields will be stronger. In other words, the nominal interest rate of long-term US debt is ahead of inflation expectations, so the real interest rate of 10-year US debt is rising, which is also the reason why the real interest rate of long-term debt can deviate from that of short-term debt.

7. The focus of the problem is not only gold, but also the global financial market. Whether it is a bull market in the US financial market or a bull market in the global financial market, it is largely based on the negative real interest rate of US debt.

8. The logic is simple, because the Fed's easing has pushed the real interest rate to a negative value, and investors who need safe asset allocation have to look for certainty or safe products other than national debt from all over the world. For example, in the second quarter of last year, the epidemic caused a surge in online office demand, so funds were allocated to a technical department.