“Gold market signals US recession risks as inflation, economic uncertainty and strong bullion demand drive prices. A 15% YTD rise in spot gold, ETF inflows, and EM central bank purchases support bullish sentiment for 2025 amid tightening equity market conditions. The S&P 500 in gold terms has plunged to its lowest levels since the 2020 pandemic. The mean ratio in March has dropped to around 1.9x versus 2.3x in December 2024 and a cyclical peak of 2.5x last February. During the peak Covid shock Mar–Sep 2020, the ratio hovered just above 1.7x. Weaker US economic data and heightened domestic and foreign policy uncertainty have prompted a strong bid for gold this year amid concerns about a US growth contraction, sticky inflation, and higher macro volatility premiums. These market concerns were echoed in the latest SEP coming out of the March FOMC.”
Morten W. Langer
