The gold market remains the superior safe haven as the world deals with rising debt, high inflation and recession risks - Crescat Capital's Tavi Costa CrescatCapital TaviCosta debt
- The perfect storm is building in the gold market as the Federal Reserve maintains its hawkish bias and continues to push the economy closer to a recession. According to one market strategist, gold's value compared to equities and bonds makes it the perfect portfolio diversifier.
Costa has sounding recessionary alarms through most of 2023. His research has noted that not only is the yield curve at its most inverted in recent history, but 90% of the curve is inverted, meaning across the spectrum, short-term yields are higher than long-term rates. However, according to his research, the number of foreign buyers of U.S. debt is currently at its lowest point in 19 years.
"What's happening today with central banks buying gold is that re-emphasizes this sort of chess game being played around these de-globalization trends and the need to own neutral assets," he said."With interest rates around the world moving higher, we are going to see a lot more volatility in foreign exchange markets. In this environment, central banks will need to enhance their reserves over time by owning more precious metals.
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