Inflation has fallen from its peak. What is the question for gold investors?

Hello Tim,

Welcome to this weeks market update!

Inflation has fallen from its peak, but remains stubbornly high. The question for gold investors is: will real yields (nominal yields minus inflation) start to stagnate or fall, or will the Feds tightening push them higher still?

If hawkish policy continues unabated, the risk of a downturn rises exponentially. The economy has proven surprisingly resilient over the last year and a half, but signals from the real estate and banking sectors show that the economys breaking point is closer than we would like to believe.

If the economy does falter under further tightening, gold will become the go-to insurance policy like it did during the previous two recessions: the Global Financial Crisis and COVID-19.

Gold: Growth Asset or Insurance Policy?

Should investors own gold to capitalize on price increases, or hedge against the incoming recession? The answer may depend on monetary policy.

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