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Inverted yield curve + coronavirus = catalyst for gold – Investment observation

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Since Birch Gold Group

This week, Your News to Know summarizes the latest major news related to gold and the economy in general. Stories include: Why might the coronavirus outbreak be the catalyst for the next gold break? The analyst says that gold is preparing to break $ 1,800, and the treasure of Iron Age coins found in Britain was declared a treasure.


The coronavirus could be the black swan for a break in the gold processing market.

Even before the coronavirus pandemic, gold had been recording its best performance in seven years riding on a multitude of strong drivers. Among them was a shift towards a lax monetary policy by the Federal Reserve (followed by other central banks around the world), which solidified the place of gold above the important level of $ 1,500.

According to Arkadiusz Sieron of FX Empire, the triple rate cut of the Fed in 2019 came as a direct response to recessive concerns after the Treasury yield curve had reversed. However, a few months after an apparent normalization, the differential between 10 and 3 month Treasury bonds became negative at the end of January, marking the second investment in less than a year.

Immersion in negative territory quickly sent gold to $ 1,580, and the metal has stuck to these levels, even two weeks after the performance curve He went back to green. Sieron believes that another investment is underway, and that fears about a domestic recession could be significantly reinforced by the outbreak of coronavirus.

So far, the outbreak seems a more dangerous version of the SARS epidemic, which claimed $ 40 billion of the global economy and sent mass investors to take refuge in assets. However, today's global economy has been contracting for a while, and gold is now one of the few viable safe haven options available in the wake of negative performance bonds. Unlike in 2019, the last investment in the yield curve occurs as a result of the 10-year Treasury yield reduction, leading Sieron to believe that the coronavirus pandemic could aggravate existing concerns about global growth and act as the catalyst for the next break in the gold market.

Analyst: Gold is finishing its lateral price action and is preparing to move to $ 1,800

Gold prices have been moving mainly laterally since the metal was set above last year's high of $ 1,553 per ounce. And although some analysts believe that this form of price action is optimistic enough on its own, a company believes that gold is almost finished around the seven-year highs and is preparing for a jump of approximately 15%.

As Florian Grummes, a market analyst at Midas Touch Consulting, said in a report published last Wednesday, gold seems to be building momentum as prices Bounce between $ 1,535 and $ 1,600. Despite the outstanding gold performance in 2019, Grummes believes that true fireworks are yet to come, and that a stable movement of more than $ 1,600 will be the most likely trigger. Grummes also points out that the bullish sentiment has paved the way for a very exciting action in the market.

"Every dip is being bought quickly and surprises are always going up," he said. "Although gold has already increased by more than US $ 450 from the low of US $ 1,160 in August 2018, the bulls remain in control and show no weakness."

While the $ 1,600 level is of undeniable psychological importance, Grummes said a direct move toward $ 1,800 could occur as soon as gold establishes a support above $ 1,590. In line with the strength the market has shown for almost a year, Grummes added that a short-term setback below $ 1,550 is very unlikely.

Archaeologists have unearthed a treasure of gold coins from the Iron Age in Suffolk, England

While the reserves of ancient gold coins are always an extremely valuable find, the peculiarities surrounding the 19-coin treasure of Suffolk, England, found in February 2019, have led archaeologists to fold finding a treasure.

The coins were found in an area near Blythburgh within a square of approximately 32 to 49 feet by a metal detector. The experts did not take long to realize that the finding was of exceptional value, with an unusual mix of rare gold coins minted during the Iron Age.

According to Suffolk's coroner, Nigel Parsley, some of the coins featured designs traditionally associated with the region. However, several currencies were highlighted, such as gold coins and quarter coins attributed to a pre-Roman tribal leader named Addedomaros, King of Trinovantes.

Archaeologist Dr. Anna Booth said that these coins are not commonly found in Suffolk, but are associated with neighboring regions. In addition, Booth said the treasure contained a coin never seen before, some rare floral designs and two unusual pieces with an inverse S-shape.

Booth added that the coins, which mostly date from 45-25 BC. and it is believed that they were deposited around the year 20 d. C., have generated great interest in several museums.


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