Schroders/James Luke/1-24-2023

“Every cycle is different and clearly the US economic cycle is far from the only factor influencing the gold market. One observation we would make is that when the policy responses to US have been particularly loose/accommodative, the gold price performance has been most explosive. This was the case in 1973 (when Arthur Burns was Federal Reserve governor) and was also the case in 2008 and 2020.”

USAGOLD note:  It is still up in the air whether or not the US is going to slide into a recession, but if it does, gold and gold stocks have been clear beneficiaries during past economic slowdowns, according to James Luke, fund manager at London-based Schroders. In five of the last seven recessions, gold outperformed stocks and usually by a wide margin.