The recent, sharp pullback in gold prices should surprise no one, according to financial analysts, who argue that the yellow metal’s extraordinary run this year has seen it become increasingly “unmoored from any fundamental valuations.”

Despite the correction, which included its biggest single-day fall in over a decade, gold remains at a record high in inflation-adjusted terms.

The rally is becoming harder to justify using traditional economic logic. According to a report from Renaissance Investment Managers, historically gold has moved inversely to real yields on US government bonds, meaning when the real return on Treasuries rises, the non-income-paying gold becomes less attractive.

However, this foundational relationship “broke down in 2022.” Gold prices have continued to march higher even as real yields have climbed, a divergence that is the classical early warning sign of a market bubble driven by sheer human psychology.