Latest News

Economic Downturn Is Gathering Pace. Rally in Gold Prices?


December 20, 2022 ( Newswire) Business activity declined sharply in December. It signals an upcoming recession – a time that suits gold particularly well.

The economic downturn is gathering pace. The flash US PMI Composite Output Index came at 44.6 in December, down from 46.4 in November. It was the sharpest decline in business activity since May 2020 or, excluding the initial pandemic period, since the Great Recession. The decline in business activity was driven by the strong decrease in the new orders, as inflation and higher interest rates dampened demand.

Both services and manufacturing are suffering. The S&P Global Flash US Services Business Activity Index registered 44.4 in December, compared to 46.2 in November. The fall in the services was the fastest in four months and among the quickest in the series history that started in October 2009. Meanwhile, the S&P Global Flash US Manufacturing PMI posted 46.2 in December, down from 47.7 in November. It was the fastest downturn since the initial pandemic period in 2020, which was driven by one of the sharpest declines in new orders since the global financial crisis of 2008-9.

PMI Signals Recession

There is a silver lining to the report. The inflationary pressures softened importantly at the end of Q4 2022. It seems that the Fed’s tightening cycle has the desired effect on inflation. However, it comes at significant economic costs. Inflationary pressure subsided partially because of the weakening demand. In other words, the PMI shows that a recession is coming! Actually, according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:

Business conditions are worsening as 2022 draws to a close, with a steep fall in the PMI indicative of GDP contracting in the fourth quarter at an annualized rate of around 1.5%.

Implications for Gold

What does it all mean for the gold market? Well, the softening inflationary pressure combined with the economic downturn is fundamentally positive for gold and silver prices. They imply that the U.S. monetary policy will be less and less hawkish and more and more dovish. Additionally, the recessionary conditions should at some point increase the safe-haven demand for gold.

So far, the price of gold has fluctuated slightly below $1,800, as the chart above shows. It’s possible that it declines further amid a still hawkish Fed or the rush towards cash during the initial phase of the next economic crisis. But when this period passes, gold could rally amid recessionary or even stagflationary worries.

If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!

Arkadiusz Sieron, PhD
Sunshine Profits: Effective Investment through Diligence & Care

More Info:

This news is published on the Newswire – a global digital news source for investors and business leaders

Disclaimer/Disclosure: is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.

More disclaimer info: Learn more about publishing your news release and our other news services on the newswire and

Global investors must adhere to regulations of each country. Please read privacy policy: – investing ideas in gold and mining stocks

Like Gold Stocks? View our Gold / Mining Stocks Directory

November Housing Starts: Record Number of Housing Units Under Construction

Previous article

PayPointCoin (PPC) Is Now Available for Trading on LBank Exchange

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News