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Inversion of yield curve brings gold to GBP all-time high

Posted by

Tom Pelc Investment Director - The Coin Cabinet

Well stock market turmoil in recent days with the S&P500 losing just over 6% since the July all time highs. Gold remains a safe haven play at present as the US 2s10s yield curve inverted (10 year yield below 2 year yield) this week, and historically has been a reliable indicator of an impending recession looming in the US economy. Note also the UK yield curve (2s10s has also inverted this week).

Remember my last post at the start of August was entitled “The yellow metal can shine even brighter in August”, and so far so good with Gold reaching an intra-day high print this month of $1,535 (6 year highs), my target for near term players has been $1,586 so there is still room to grow right now, and longer term a lot more.

Gold Sovereigns and Britannias for bullion market performance still rising. Only a week ago Britannias (1 oz gold coins) were trading spot at £1,200 , and now are nearer to £1,252 and had risen to £1,264 at its highs the other day.

I still think semi-numismatic coins are good protection alternative to stock market woes and financial market deterioration. Classic signal of flows out for positive risk assets is the MSCI Emerging Markets global index has lost over 9.0% of its value since June.

Remember China has an agenda to have a gold to GDP ratio matching the US and EU which means they target 8,000 tonnes.

Support levels in Gold in USD : $1,483          $1,456           $1,380 

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