The everything hedge has been following the leader of the rising long end, and a recent chart comparison between gold and Japan’s 30-year bond yield has revealed some interesting insights.

As we see, gold has consistently outperformed Japan’s 30-year bond yield since 1990. The gold price has increased by over 1,600% during this time period, while the Japan 30-year bond yield has only increased by around 250%. This is a stark contrast to the performance of both investments in the early 1990s, when the gold price was around $300 and the Japan 30-year bond yield was around 6%.

There are several reasons why gold has outperformed Japan’s 30-year bond yield over the long term. One reason is that gold is a safe-haven asset, which means that investors tend to flock to it during times of economic uncertainty or geopolitical tension. This was certainly true in the early 1990s, when the global economy was experiencing a recession and there were concerns about the potential collapse of the Soviet Union.

Another reason why gold has outperformed Japan’s 30-year bond yield is that it is not subject to the same inflationary pressures as bonds. While bonds offer a fixed return in the form of interest payments, they are also exposed to inflation, which can erode their purchasing power over time. Gold, on the other hand, has historically held its value better than most other assets, making it a more attractive option for investors looking to protect their wealth from inflation.

It’s worth noting that both gold and Japan’s 30-year bond yield have experienced periods of volatility over the past three decades. However, the long-term trend has been clear: gold has consistently outperformed Japan’s 30-year bond yield. This suggests that investors may want to consider gold as a hedge against inflation and economic uncertainty, particularly in times when central banks are implementing expansionary monetary policies.

The comparison between gold and Japan’s 30-year bond yield over the past three decades provides valuable insights into the performance of these two investment options. While both have experienced periods of volatility, the long-term trend has been clear: gold has consistently outperformed Japan’s 30-year bond yield. As central banks continue to implement expansionary monetary policies and inflation remains a concern, investors may want to consider gold as a hedge against these risks.