Gold Bulls Look Beyond Fed as Growth Slows, Recession Risks Rise | Metals Mine

  • Gold Bulls Look Beyond Fed as Growth Slows, Recession Risks Rise

    From bnnbloomberg.ca

    Gold bulls are betting there’s more to the metal’s rally than rates. Bullion is on its way to a third straight monthly gain, trading near a six-year high as central banks signal easier monetary policy. The Federal Reserve is expected to cut U.S. interest rates by a quarter percentage point on Wednesday. Gold analysts and traders are looking for affirmation from Fed Chairman Jerome Powell that further rate reductions are in store to justify the run-up, with some saying the precious metal may have gotten ahead of itself. “The market can easily pull back in the wake of a cut without the overall gold rally being ... (full story)

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EF5
Jul 30, 2019 10:49pm
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While gold should hold up well during a recession, I'd still be hesitant to hold it for two reasons...

1.) Deflation may wind up being a negative for gold. CBs will probably ease enough to where this isn't a problem, but there's still cause for concern.
2.) When the markets get really bad, whole portfolios are liquidated to meet margin calls. People throw the baby out with the bath water so gold can take a hit (though it could just be a brief drawdown.)
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