In that article, Laith Khalaf, senior analyst at Hargreaves Lansdown, said, "If interest rates go back up to two to three per cent, a distant but real prospect, that tips the scales away from gold."

Mr. Khalaf's statement seems to ignore the fact that the sovereign bond markets are being propped up by central market intervention via ZIRP or NIRP policies. His statement suggests that central governments could afford to have sovereign debt yields to revert to more normal levels. If sovereign debt yields were to so revert, central governments would risk exploding debt dynamics, and by extension government insolvency.

Guessing that government insolvency is undesirable, I'm going to further guess that central banks and central government will cooperate to keep sovereign debt yields low. Indeed, such cooperation may be exactly what is necessary for central governments to deleverage via financial repression. Monetary policymakers are already working the problem. See, e.g., "The Case for Monetary Finance -- An Essentially Political Issue" by Adair Turner, and "The Chicago Plan Revisited" by Jaromir Benes and Michael Kumhof.

Old School