For the last decade, TIPS yields and gold have had a negative 88% correlation. The logic is simple enough: since gold doesn't generate any income, falling TIPS rates reduce the opportunity cost of holding gold. We can see this play out in the charts below. In early 2008, the peak in gold was accompanied by a trough in TIPS yields, and then later in 2008, the trough in gold was accompanied by a rise in TIPS yields.
On December 10, 2012 TIPS yields bottomed at -.87%, and this began the slide in gold from $1700/oz. to just under $1250/oz. by the end of 2013. Since the beginning of the year, 10 year TIPS yields have fallen from 75bps to 32bps, yet gold prices are mostly unchanged.
Gold is down about 2% today, falling under $1270/oz for the first time since February. In the chart below, we transform the time series chart above to a scatterplot that illustrates the relationship without regard to time. There is not a single data point in the last decade where gold is below $1290/oz. with TIPS rates at or below 35bps. The breakdown in gold could suggest that the trend toward falling TIPS yields may be set to reverse.