The expected recession which is due to hit in the early part of next year will cause gold prices to rocket says gold strategist and veteran industry expert, George Milling-Stanley.
Despite the fact that the most recent rate hike imposed by the Federal Reserve was smaller than the 75 basis points that have become the norm this year, Chair Jerome Powell made it clear in his comments following the most recent FOMC policy meeting that this loosening of policy in no way meant the Feds were done dealing with inflation. Those remarks are of concern to markets, Milling-Stanley says as each rate hike pushes the economy closer to recession.
“Powell was categorically clear that rates are going higher in 2023. We are still in a dangerously high inflationary environment,” he said. “The inflation threat isn’t over yet. I don’t think we have seen a peak in wages or in service costs,” he said. “Six months ago, a 7% inflation reading would have been a terrifying number.
“I don’t think there is any way the U.S. economy avoids slower growth in 2023 and that will impact U.S. monetary policy,” he said. “If we do get a recession, gold will take off.”
The strategist calculates that in all seven of the last recessions, the precious metal has generated outsized returns of around 20%. If the Federal Reserve doesn’t manage its targeted ‘soft landing’ and recession does bite in the New Year, Milling-Stanley says we can expect to see gold trading around its previous record high of £1,646 ($2,000).
Don’t wait for prices to go higher or the New Year to get underway. Buy gold now.
