Oct 9, 2026 · 45 min
Rising real rates test gold as Black Monday fears return
1987 Black Monday Repeat: How Close Are We? | Adrian Day
The episode examines whether fiscal borrowing, persistent inflation, and Federal Reserve policy could pressure stocks and reshape the case for gold.
- 1Long-term Treasury yields may need to rise further before investors meaningfully rotate from stocks into bonds.
- 2Real interest rates, not nominal yields, are the decisive variable shaping gold’s prospects in this cycle.
- 3Higher rates favor selective, fundamentally grounded gold equities, with larger miners offering greater resilience when sentiment weakens.
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Adrian Day explains why real interest rates matter more than nominal Treasury yields for judging gold’s prospects.
The brief
Adrian Day joins David Lin to assess whether rising yields, persistent inflation, government borrowing, and AI financing could recreate the conditions for a 1987-style market correction.
Day argues that long-term Treasury yields do not yet guarantee a major shift from stocks into bonds, but heavier Treasury supply and private borrowing could push the 10-year yield toward 6%.
The discussion turns on real rates: nominal yields can rise while still lagging inflation, a condition that can support gold even as higher positive real rates pressure it.
Day also challenges the assumption that geopolitical shocks automatically lift gold, noting that anticipated conflicts can initially weigh on the metal while unexpected shocks may behave differently.
His portfolio response is selective rather than defensive across the board: favor gold companies whose declines look excessive relative to fundamentals, with larger miners better suited to weak sentiment.