The 10-year treasury inflation-protected securities (TIPS) worth $14 billion were auctioned or sold at -0.93% yield on Thursday. That is the lowest yield ever in an auction of that security, according to Reuters.
TIPS provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index.
In other words, TIPS yields are relevant Treasury yields adjusted for annual inflation. As per analysts, gold’s rally from the March low of $1,450 to the recent high of $1,898 has been fueled by negative real yields.
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