A perfect macro setup for gold and silver is emerging, driven by rising recession fears and favorable economic conditions, which could lead to significant price increases in the near future.
The yield curve and real tenure yield are key macro market indicators for predicting recessions and gold performance, with an inverted curve signaling an imminent recession and a steepening curve aligning with gold outperforming the stock market.
A recession creates the perfect scenario for gold and silver, with lower real interest rates, Fed cuts, and fiscal stimulus driving capital into precious metals and potentially triggering a huge move.
Gold’s technical setup is primed for a breakout from a 10-year base against the 60/40 portfolio and a 4.5-year base against the stock market, suggesting a significant upward movement if these bases are breached.
The timing of the recession is crucial, with expectations of a short-term or medium-term correction before an accelerated move in gold and silver prices over the next 12 months.
Recession fears are intensifying due to GDP contraction, government spending cuts, and tariffs, potentially leading to lower growth and Fed rate cuts, which creates a perfect setup for gold and silver to break out and shoot higher.
The 10-year treasury yield falling below the 3-month note creates an inverted yield curve, a historically accurate predictor of economic downturns within 12-18 months.
The New York Fed calculated a 20.3% probability of recession over the next 12 months at January’s end, when the 10-year yield was 31 basis points above the 3-month note.
The Federal Reserve considers the inverted yield curve a reliable recession indicator, but prioritizes the near-term forward spread as their primary economic health metric.
Despite the 10-year yield’s decline and curve re-inversion, market expectations for Fed rate cuts have slightly decreased from 97% to 95.5% over the past week.
GDP and unemployment figures should be viewed cautiously, as they are often significantly revised downward later when economic contractions become apparent.
Bitcoin’s 21 million supply cap and native unit allow it to function as a currency without an issuer, making it an economic reality that can’t be denied.
Bitcoin’s fixed supply and decentralized nature fundamentally differentiate it from inflationary and centralized stablecoins and other cryptocurrencies.
Bitcoin operates as a global, permissionless currency without a trusted third party due to its credibly enforced fixed supply and censorship resistance at the network level.
Bitcoin is simultaneously a commodity and currency operating without an issuer, using a decentralized network to control its supply, validate transactions, and transmit value.
Bitcoin functions as a unique triple-entry accounting system in the history of money, enabling trustless transactions and eliminating the need for a separate currency layer.
Defining Bitcoin as a commodity rather than a currency restricts its use and undermines its potential as a global monetary system capable of facilitating direct transactions.
Bitcoin’s trustless transactions are more efficient than credit-based systems, enabling lower costs by eliminating high fees, chargeback risks, and trust validation processes.
Bitcoin’s utility and effectiveness as a currency increase with more usage, enabling it to become a working economic system for an expanding user base.
Bitcoin’s economic efficiency improves with increased adoption and tools like Zaprite, enabling more people to escape fiat currency limitations.
Bitcoin inherently competes with the dollar, and choosing Bitcoin over fiat is a fundamental economic choice due to its unique properties.
Bitcoin’s fixed supply contrasted with the dollar’s inflation creates a natural incentive for people to store more wealth in Bitcoin and spend it, rather than holding depreciating dollars.
Tools like Zaprite enable Bitcoin payments with fiat premiums/discounts, incentivizing use without peer negotiation and improving adoption and efficiency.
Bitcoin payments require infrastructure around goods/services fulfillment to be functionally easy for consumers and businesses, not just technically possible.
The capital gains tax on Bitcoin transactions is a friction, but the main barrier to Bitcoin’s use as a currency is the lack of understanding and adoption by the general public.
Paying an invoice in Bitcoin can be more cost-effective than fiat, as demonstrated by real-life examples where fiat payment options had a 4% premium compared to Bitcoin payments.
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