Bond yields are crashing in major markets all around the world as fears of a global economic slowdown have prompted investors to seek shelter in low-risk government debt. Both Germany and Japan’s 10-year bond yields are back below zero, marking the first time we’ve seen German yields turn negative since October 2016. As I shared with you last week, the pool of negative-yielding bonds around the globe now stands at a Germany and Japan's 10-Year Bond Yields Are Back Below ZeroHere in the U.S.
One of the best defensive positions, I believe, is gold bullion and gold mining stocks, which in the past have traded inversely to yields. When yields have risen, indicating less demand for a safe haven, gold prices have sunk. And when yields have fallen, indicating a risk-off sentiment, gold prices have climbed.
Take a look below. What the chart shows is the inverse relationship between gold mining stocks and the real 10-year Treasury yield—“real” meaning inflation-adjusted. As you can see, gold stocks soared in the summer of 2016 as yields deteriorated and finally dipped below zero.Today, yields are similarly on a downward path, boosting gold stocks. Year-to-date through March 26, the NYSE Arca Gold Miners Index is up more than 10 percent.
This is why I always recommend a 10 percent weighting in gold, with 5 percent in physical gold and the other 5 percent in high-quality gold mining stocks and funds. I like to call this the 10 Percent Golden Rule, and in the past, it’s helped investors stanch some of the losses they’ve experienced during economic pullbacks and equity bear markets.
Sverige Senaste nytt, Sverige Rubriker
Similar News:Du kan också läsa nyheter som liknar den här som vi har samlat in från andra nyhetskällor.
Källa: CNBC - 🏆 12. / 72 Läs mer »