Gold continues to tumble today after a brutal Friday session took the shiny yellow metal below $1600 per ounce. Over the past four months, it's fallen more than 10 percent from its October 4 high of $1798.10.
In a note to clients, Deutsche Bank commodities analyst Xiao Fu has a few thoughts on why gold prices are falling.
Perhaps the biggest factor weighing on gold prices is the drop in the equity risk premium, which in turn is driven by rising yields.
The equity risk premium is the expected rate of return of stocks over that of bonds (here, specifically, it's defined as the S&P 500 earnings yield less the yield on a 10-year Treasury bond).
The chart below shows that gold prices track the ERP pretty closely