Last week I wrote that "downside risks remain" and specifically cited the chart below showing what happened to gold in 2008. What occurred then was real yields rose (TIPS fell) significantly on plummeting inflation expectations in line with the crash in the stock market, even though nominal bond yields remained relatively stable and the Fed was cutting short-term rates aggressively towards zero. Being highly correlated to real yields, Gold dumped ~30% at the same time.
The risk now is that we get a similar spike in real yields when gold is near perfectly correlated to