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Seeking Alpha/Clif Droke/2-24-2020
“One of the most important U.S. yield curves inverted on Feb. 20, prompting calls among market watchers for the Federal Reserve to further lower its benchmark interest rate. In this report, I’ll make the case that not only will the Fed likely lower rates, but this will in turn boost the attractiveness of gold for safety-conscious investors and thereby strengthen its ongoing bull market.
The gold price recently hit a seven-year high as investors continued to rush into safety assets. Mounting fears that the coronavirus will continue to spread, along with worries over the virus’s impact on the global economy, has been the primary catalyst for gold’s continued rally lately.”
USAGOLD note: In Clif Droke’s latest, he sees the same relationship between gold and inverted yields we covered in last month’s News & Views. The chart below shows the inverted yields between 10-year and 3-month Treasuries and the percent change in the price of gold year over year. The grey bars represent recessions.
