ANZ: gold will outperform returns of other markets during recession

Gold prices are usually under pressure on the eve of economic downturns, but once a recession finally comes, gold outperforms other types of assets in terms of bringing returns, including stocks.

During most of 2022, the gold price was pressured by aggressive monetary tightening by the U.S. Federal Reserve System and a strong dollar. These factors held back its potential growth.

As it was stated by Daniel Hynes, senior commodity strategist from Australia and New Zealand Banking Group (ANZ), the strengthening U.S. dollar harmed the precious metal sector.

Hynes also stated that the global economy is now at a turning point. He added that monetary tightening combined with high inflation would likely slow down economic growth in 2023. As he noted, a negative economic background like this is typically beneficial for gold.