This Thursday (19th), the Market in question made an observation considering the gold value and the Reversal of the yield curve, in a post entitled “Gold has space to climb” .-

In it, the page comments on the tendency of Central Banks to undergo a “reversal of the interest curve”, in a cyclical manner, which effectively demonstrates the possibility of a recession, within a period of up to 1 year. This, in turn, would be stimulated by injections of money into the economy.

Legend: Gold for S&P 500, after reversing the interest curve
  • In blank: Gold for S&P 500 – Rate of return during the 1973-4 Recession and Bubble Technology
  • In yellow: Gold for S&P 500 – Ratio of return during all 5 times that the Interest Curve was inverted for the first time in 70%, since 1970
  • In blue: Gold for S&P 500 – Return ratio since August 2019

"Historically, gold has appreciated and stock markets have fallen in the two years following this inversion, which already occurred in August 2019."

Central Bank Assets vs. Gold.
Central Bank Assets vs. Gold
  • In blue: Assets of the 8 largest central banks (in millions of dollars) – Left
  • In yellow: Gold price in USD per Troy Oz. – Right

American Recession and the Interest Curve Reversal

If you didn’t quite understand what this “cyclical period” is all about, or the Reverse Interest / Yield Curve, we recommend that you watch this economist video Fernando Ulrich, explaining about it.

In it, in addition to explaining what these two very important concepts are, Ulrich also explains why this phenomenon may signal a future economic recession, and what are their relations.

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So, do you think the price of gold will go up? If so, share this publication and be sure to follow Cointimes on Twitter.


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