In several articles that I have written in the recent past, I have maintained my bullish view on gold for different reasons. Gold price trend as compared to real interest rates is yet another indicator of bullish times for gold in the coming years. The real interest rate here is the 5-Year Treasury inflation-Indexed security.

The chart below plots gold prices and 5-Year Treasury Inflation-Indexed Security rates for the period 2003 to March 2016.

It is clear from the chart that as real interest rates plunge, gold trends higher. While gold price is not solely a function of this factor, real interest rates certainly impact gold price sentiments.

With global economic uncertainty and with central banks globally prepared to unleash yet another round of expansionary monetary policies (if required), I expect real interest rates to trend lower and gold to trend higher in 2016.

It is worth mentioning here that at the end of 2015, the 5-Year Treasury Inflation-Indexed Security was at 0.5% and it is currently at negative 0.3%. It is therefore not surprising to see gold having the best quarter in a generation.