Bonds or gold: how you choose (in plain terms)
The question isn't "gold or bonds" as a fixed choice, but when one takes over from the other. Starting point: gold is the base. Then a trend signal says whether the bond is worth the detour, a quality filter says which one, and behavior in a crash says what you truly take refuge in. Descriptive — not advice.
Gold is the base
Over the long run, your money always loses against gold. The reason is simple: governments print money, gold doesn't dilute. Measured in gold, no currency goes the distance over several decades. That's the starting point, not an opinion.
When the bond takes over
Sometimes, lending to a government — buying a bond — pays more than holding gold for a while. How do you know without guessing the future? You measure the bond in gold, and watch whether it has been rising or falling for a few months (its 10-month moving average).
- It's rising → the bond has the wind at its back, it earns a place.
- It's falling → you stay in gold.
This is a trend signal, not a prediction. We don't claim to know what rates will do: we read what the market is already doing.
Which one? The quality filter
Not all bonds are equal. We keep only serious issuers, on two criteria:
Does the country respect its own rules and its currency? A solid rule of law means: you'll be repaid, and the currency won't be wrecked. Fragile jurisdictions are set aside.
Is there a credit bubble signaling a coming banking crisis? If so, the issuer is set aside until the signal settles.
A country that pays a fat rate but whose currency collapses isn't a good bond: the filter removes it. What's left are the sound currencies.
In a crash, the only cushion left
For a long time, the government bond played the cushion: when equities fell, it rose. Since 2022, that no longer works — when equities drop, bonds drop with them. You can see it in the way their correlation, long negative, has turned positive again.
In a word
- Gold is the bedrock: over time, nothing beats it.
- A bond is a bonus when its trend measured in gold rises and the country passes the quality filter.
- In a storm, the refuge is no longer the bond: it's gold.
Go further
- The Cap Nord method — reading the markets without predicting them.
- 10-year sovereign yield — the bond, defined.
- Comparing a currency in USD or in gold — why we read in gold.
See regimes by country
Descriptive and historical — neither advice, nor a rating, nor a promise of performance. Method: internal Cap Nord study (trend signal measured in gold, rule-of-law and credit filters, behavior in a crash).