30 June 2023
Gold and silver prices have recently declined due to more hawkish central bank policies. This tightening has caused stress in various sectors, such as finance, real estate, and households. Fault lines in the economy have been exposed, and any one of them could lead to a major crisis involving defaults and debt restructuring. Central banks may resort to printing money to save select entities, further devaluing currencies. Not only precious metals, but equities, bonds, and housing markets have also seen value declines. However, historically, gold tends to rally during recessions as central banks cut rates to restore stability. The long-term gold to S&P 500 ratio suggests a potential rally in gold as fiat currency printing resumes.