Your News to Know rounds up the most important stories about precious metals and the overall economy.
- What gold’s ominous “death cross” actually tells us
- Why UBS is bullish on gold – but hardly alone
- What central-bank gold buying and China’s new digital yuan experiment have in common
Gold’s “death cross” is real – but it’s not an obituary
I have never cared much for financial jargon.
Sometimes a complicated term describes a genuinely complicated idea. Other times, it makes a fairly simple observation sound like knowledge delivered from the mountaintop.
“Death cross” lands somewhere in between.
Business Insider recently reported that gold ended the second quarter with one.
A death cross occurs when an asset’s average price over the previous 50 days falls below its average price over the previous 200 days.
That is a real technical signal. It tells us that recent price momentum has weakened compared with the longer-term trend.
And yes, the name sounds like something the Grim Reaper might carve into your front door. Frankly, the technical analysts have come up with some pretty ridiculous names: Hindenburg Omen, Abandoned Baby and Three Black Crows for example. (I swear I’m not making this up.)
The price of gold fell approximately 16% during the second quarter – its worst quarterly performance since 2013 – and was down roughly 27% from the record above $5,600 it reached in January.
To be clear, those numbers are not fabricated. Although I disagree with the article’s conclusions, they did play fair with the numbers. Even so, there is a framing problem.
“Worst quarter in 13 years” tells us how quickly gold fell during one three-month period. It does not tell us whether gold’s long-term monetary role has changed, whether central banks have stopped buying or whether the economic pressures that helped drive gold higher have disappeared.
It’s like this: A speedometer tells you how fast a car is moving. It doesn’t tell you where the car is going.
This “death cross” has the same limitation.
Technical signals describe market behavior. They tell you how traders react over a set period. They don’t take into account the reasons for the traders’ actions at all.
That’s their major weakness. With their narrow-sighted focus on price charts, technical indicators don’t take into account considerations like sovereign debt levels, inflation, geopolitical uncertainty or demand. They simply look at prices and trading volume.
Nor are they infallible. Like everything in investing, past performance does not indicate future results.
Yes, a death cross can precede further price declines. And it can also occur after much of the decline is in the past. By the time two long-term moving averages finally cross, prices may already have fallen substantially.
Now, all this does not make the signal useless. It means the signal should not be mistaken for a prophecy.
Gold’s recent rebound illustrates the problem. After falling below $4,000 on June 24, gold recovered above $4,100 by the end of the following week.
The Wall Street Journal reported that gold futures ended the week of July 2 at $4,112.70.
That rebound does not prove the correction is over. Gold could fall again. It could spend months moving sideways. But it does remind us that “death cross” and “death” are not the same thing.
The Business Insider article points to several legitimate short-term pressures.
The U.S. dollar strengthened. Expectations for immediate Federal Reserve rate cuts faded. Higher rates increased the opportunity cost of holding an asset that does not pay interest.
Those forces matter.
What we should not do is leap from “the Fed may keep rates higher for longer” to the certainty that the biggest rate-cutting cycle in half a century is right around the corner. The Federal Reserve held its target rate at 3.5%-3.75% in June and said inflation remained above its 2% objective. The current bias at the Fed seems to be toward tighter money, more expensive credit and a stronger currency.
Now, I do not know precisely when the Fed will cut again. Neither does anyone else.
That uncertainty is itself part of the case for diversification. Families should not have to wager their financial futures on guessing the date and direction of the next central-bank decision.
A gold price correction deserves to be taken seriously. It does not deserve to be treated as evidence that physical gold has suddenly become irrelevant.
Gold’s short-term price is set by buyers and sellers reacting to interest rates, currencies, liquidity and (most of all) emotion.
Its longer-term relevance comes from something more durable: Physical gold does not depend on a government promise, a bank’s solvency or a central banker accurately predicting the future.
A death cross can change traders’ opinions about gold, but it cannot change that.
UBS is bullish on gold – and it is not alone
Business Insider described UBS as an “outlier” because the bank expects gold to rise approximately 28% over the next year.
That description is understandable when compared with the article’s short-term bearish outlook.
But UBS is not standing alone in the wilderness, waving a gold bar while every other institution runs in the opposite direction.
UBS’s actual outlook is more nuanced than either “bullish” or “bearish.”
On June 25, UBS said momentum and technical indicators could keep gold between $3,850 and $4,000 in the near term. At the same time, the bank expects gold to move toward $5,200 over the following 12 months:
That is not blind optimism.
UBS acknowledges that gold may remain under pressure before recovering. Its longer-term view rests on expectations for eventual rate reductions, dollar weakness and continued central-bank demand.
State Street has expressed a similarly constructive outlook. Its midyear analysis says structural support for gold remains intact, with prices potentially reaching $5,500 by the end of 2026.
State Street also acknowledges the same short-term obstacles: tighter monetary policy, energy-driven inflation and a stronger dollar.
In other words, UBS is not contradicting every other forecaster.
It is emphasizing a different time horizon.
That distinction matters.
A forecaster can believe gold will struggle for the next three months and still believe it will be substantially higher next year. Those positions are not contradictory.
Weather provides a useful analogy.
A cold weekend does not disprove summer. Nor does an unusually warm afternoon guarantee the end of winter.
Time horizon changes the meaning of the forecast.
This is also why I would not become too attached to any specific target – whether it is $5,200, $5,500 or $6,000.
Forecasts are scenarios, not promises.
They depend on assumptions about inflation, interest rates, central-bank purchases, geopolitical events and currency demand. Change the assumptions and the target changes with them.
I understand why higher forecasts attract attention. A prediction of $6,000 gold makes a more exciting headline than a discussion of monetary reserves and purchasing power.
But physical gold owners should not need a spectacular price surge to justify every decision.
In fact, a gradual increase may be healthier than a sudden vertical move.
Rapid price increases often attract speculative buying. That can pull future demand into the present, push prices beyond what near-term conditions support and create the possibility of a violent correction.
Slow advances are less exciting.
They may also be more durable.
The more important development is not whether gold reaches one institution’s target by one particular date. It is the upward shift in the price levels financial institutions now consider plausible.
Only a few years ago, the debate centered on whether gold could remain above $2,000.
Today, analysts debate whether a correction might take gold below $4,000 – or whether it could reach $5,000-$5,500 over the coming year.
That does not guarantee gold will never revisit a lower level. Markets do not make promises.
But it shows how dramatically the baseline has changed.
[Internal link: Previous Birch Gold article about institutional gold forecasts]
For families considering physical precious metals, the prudent lesson is not to chase a forecast.
It is to understand why so many institutions remain constructive despite one of gold’s sharpest quarterly declines in years.
Those institutions are looking past the chart.
They see growing government debt, unresolved inflation risk, geopolitical fragmentation and sustained demand from central banks.
That brings us to the most important gold story of the week.
Central banks are planning for a more divided monetary world
The Official Monetary and Financial Institutions Forum – usually shortened to OMFIF – surveyed 90 central banks, sovereign institutions and public pension funds overseeing a combined $10 trillion.
Reuters summarized the results here. For the first time in the survey’s history, more central banks said they expect to reduce their dollar allocations over the next decade than increase them. That is shocking.
But it does not mean the dollar is about to disappear.
There remains no obvious replacement capable of matching its global reach, liquidity and infrastructure. The dollar also strengthened during the first half of 2026.
Nevertheless, 79% of the central banks surveyed believe the monetary system is moving toward a more multipolar structure.
That means a world in which reserves are divided among a wider range of currencies and tangible assets rather than concentrated so heavily in one nation’s money.
Gold sits at the center of that transition.
According to OMFIF, 82% of the central banks surveyed already hold gold. On balance, 30% intend to increase their allocations over the next one to two years.
The World Gold Council’s separate 2026 survey produced an even stronger result.
It found that 89% of reserve managers expect total central-bank gold holdings to rise over the coming year. A record 45% said their own institution expects to increase its gold holdings:
Think about the contrast.
Gold has just experienced its worst quarter in 13 years.
Technical analysts are discussing a death cross.
Yet the institutions responsible for managing national reserves are not fleeing. Many are planning to buy more.
Central banks understand better than most that short-term price weakness and long-term strategic value are two different questions.
They are not buying gold because they believe every week will be profitable.
They are buying because gold offers liquidity, carries no foreign government’s credit risk and remains widely accepted across political borders.
It is monetary common ground in an increasingly divided world.
The same OMFIF survey found continuing interest in the euro and Chinese yuan, although respondents acknowledged structural problems with both.
That brings us to another OMFIF story – this one about China’s digital currency experiment.
China’s digital yuan crosses an important line
OMFIF recently examined a significant change to China’s digital yuan. On January 1, China changed the legal and financial treatment of digital yuan held in commercial-bank wallets.
The shorthand description is that the digital yuan became interest-bearing. The underlying arrangement is more complicated – and more revealing.
China did not simply begin paying interest directly on central-bank money.
Instead, digital yuan held in commercial-bank wallets was reclassified as a “commercial-bank deposit liability.” Those balances can earn deposit interest, receive deposit-insurance coverage and appear on the commercial bank’s balance sheet. It’s a little more than an accounting category, though. The digital currency remains centrally designed and standardized, but the commercial banks continue to hold the customer relationship and deposit liability.
So, why go through all that trouble?
Because central banks face a problem when designing retail digital currencies.
Imagine the Federal Reserve offered every American an account that was safer than a bank account and paid competitive interest.
During a financial panic, depositors could move their savings from private banks to the central bank with a few taps on a phone. That could drain banks of the deposits they use to make loans – and potentially accelerate a bank run rather than prevent one.
Most Western CBDC proposals have tried to solve that problem by making digital central-bank money less attractive as savings.
The European Central Bank has proposed holding limits and no interest for its digital euro. China chose a different route: Let the digital currency behave like a bank deposit while keeping commercial banks inside the system.
It is a clever solution. That does not mean citizens should ignore the risks.
CBDCs raise legitimate questions about privacy, government access, financial exclusion and the durability of cash. Those questions should be answered in enforceable law and technical architecture – not merely through reassuring press releases. (Except in China, where, of course, those questions simply cannot be asked if you value your life.)
At the same time, we should not claim that the Federal Reserve and European Central Bank are preparing to copy China’s model immediately.
OMFIF notes that Washington has stepped back from launching a retail CBDC. The European Central Bank’s current proposal specifically says the digital euro would not pay interest and would complement rather than replace physical cash:
Could those promises change someday?
Of course.
Policies change. Political priorities change. Emergency measures have a way of becoming permanent.
But “could happen” is not the same as “is happening.”
The sober concern is not that cash will certainly vanish within five, ten or 30 years. No one can responsibly make that prediction.
The concern is that the financial system is moving steadily toward forms of money that are easier to monitor, easier to restrict and increasingly dependent on digital infrastructure.
Convenience is real.
So is the loss of a tangible fallback.
Cash lets two people transact without electricity, internet access or permission from an intermediary. Physical gold and silver offer another form of tangible value that exists independently of a payment network.
Neither is obsolete simply because a phone application is faster.
The death cross and the digital yuan tell the same story
At first, gold’s death cross and China’s digital currency experiment appear to have nothing in common.
One is a technical price signal.
The other is an overhaul of monetary infrastructure.
But both stories ask us to confuse the immediate with the important.
The death cross tells us gold’s recent price momentum is weak. It does not tell us whether the reasons central banks hold gold have disappeared.
A digital currency offers faster, more convenient payments. That does not tell us whether citizens are better served by making every form of money dependent on an institution and a network.
Central banks appear to understand this distinction.
They are experimenting with increasingly sophisticated digital money while accumulating an asset that has no software, no central administrator and no counterparty.
That is not a contradiction.
It is diversification.
Monetary authorities want the speed of digital payments and the resilience of physical gold.
Families can apply the same principle to their own savings.
Physical precious metals will not rise every quarter. They do not make short-term volatility disappear, and no forecast can guarantee their future price.
Their value lies in providing something structurally different – tangible savings that do not depend entirely on digital access, monetary policy or someone else’s promise.
A death cross may tell us what gold has done recently.
Central banks are showing us why they still want to own it.
Learn more about the role physical gold and silver can play in diversified savings, and request your free 2026 Precious Metals Information Kit today.
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