Rising real interest rates raises the opportunity costs

Gold was trading sideways on Wednesday around the $1,310 level, holding onto gains of nearly 9% this year.
 This year the price of gold has found some support from safe haven buying thanks to the political crises in Eastern Europe and the Middle-East, but the number one negative factor working against the metal has been expectations of higher market interest rates and rising bond yields in Buy Archeage Gold.As the chart shows the relationship between real long-term interest rates in the US (as proxied by 10-year US inflation-linked bonds) and the gold price is strongly negative.
Rising real interest rates raises the opportunity costs of holding gold because the metal provides no yield, and entices investors to rotate into riskier assets like stocks as evidenced by outflows from physical gold-backed ETFs which have continued this year.Higher rates also boost the value of the dollar which usually move in the opposite direction of the gold price.