US2Y Treasury Yield vs Gold
The correlation between the 2Y & gold indicates that when the US2Y peaks, there is a US recession & gold rallies to new highs subsequently after.
** 1 = Peak in US2Y (1989) did not see a rally in gold because gold was depegged from the USD in the mid 1970's.
2 = Peak in US2Y (2000) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
3 = Peak in US2Y (2007) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
4 = Peak in US2Y (2020) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
Speculation
5? = Do we see a continuation of the opposite correlation between the US2Y & Gold when the US2Y peaks?
I believe so. However, I see two scenarios for gold if & when the US2Y peaks.
Scenario #1: Gold rallies to new highs after the peak in yields
Scenario #2 (Base Case): After peak in US2Y, Gold rallies to tests previous high & fails to make new highs.
** 1 = Peak in US2Y (1989) did not see a rally in gold because gold was depegged from the USD in the mid 1970's.
2 = Peak in US2Y (2000) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
3 = Peak in US2Y (2007) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
4 = Peak in US2Y (2020) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
Speculation
5? = Do we see a continuation of the opposite correlation between the US2Y & Gold when the US2Y peaks?
I believe so. However, I see two scenarios for gold if & when the US2Y peaks.
Scenario #1: Gold rallies to new highs after the peak in yields
Scenario #2 (Base Case): After peak in US2Y, Gold rallies to tests previous high & fails to make new highs.