The Trade War, the Gold Correction, and the Opportunity
We would like to start today's analysis by asking you a question, can more safe-haven buying into gold be a reason to more negative-yielding debt worldwide?
we have seen gold bulls back in control on Wednesday as prices recovered from $1380 to $1425 an ounce.we have witnessed support comes from markets’ anticipation of looser global monetary policies, renewed safe-haven demand, and fresh chart-based buying.
The amount of negative bond yield is on the rise Globally and as a hedge against threatening deflation we have witnessed investors involves into more safe heaven buying and bought gold and other alternative currencies(Bitcoin).
Global trade tensions which have slowed global growth has also been a key factor for the steep incline we have seen in the precious metal market, it also had a negative impact on global bond yields. The 10-year U.S. Treasury yield has dropped from 3.2% in November 2018, to about 2.0% today however the most disturbing data came outside from the U.S.In some of the countries we are seeing negative-yielding debt,The appropriate example is Germany where the 10-year bond yield is now -0.30% that eventually means investors now have to pay from there pocket as they have invested in the 10-year German government debt.
However, you need to keep in mind that Gold prices have risen faster than the amount of negative-yielding debt. we believe there are only two possibilities left either gold prices above $1,400 are too high, or the world needs to brace itself for more negative-yielding debt to come, what do you think?
we have seen gold bulls back in control on Wednesday as prices recovered from $1380 to $1425 an ounce.we have witnessed support comes from markets’ anticipation of looser global monetary policies, renewed safe-haven demand, and fresh chart-based buying.
The amount of negative bond yield is on the rise Globally and as a hedge against threatening deflation we have witnessed investors involves into more safe heaven buying and bought gold and other alternative currencies(Bitcoin).
Global trade tensions which have slowed global growth has also been a key factor for the steep incline we have seen in the precious metal market, it also had a negative impact on global bond yields. The 10-year U.S. Treasury yield has dropped from 3.2% in November 2018, to about 2.0% today however the most disturbing data came outside from the U.S.In some of the countries we are seeing negative-yielding debt,The appropriate example is Germany where the 10-year bond yield is now -0.30% that eventually means investors now have to pay from there pocket as they have invested in the 10-year German government debt.
However, you need to keep in mind that Gold prices have risen faster than the amount of negative-yielding debt. we believe there are only two possibilities left either gold prices above $1,400 are too high, or the world needs to brace itself for more negative-yielding debt to come, what do you think?
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