Is It Time To Buy Gold? Here’S How It Performed In Past Recessions

This week’s highlight was on gold as Indian gold prices hit a record high of Rs 56,034. Indian gold prices have been up 17.6 percent prior to now 12 months. International prices hit $1,884 an oz, a gain of virtually 16 percent from the September lows. So, with expectations of single-digit returns in equities this 12 months, should investors proceed to give attention to alternative asset classes like gold?

Historical data suggests that gold returns have outperformed the Sensex in one-, five- and 15-year periods on a compounded basis.

Expectations of a gentle global recession, further weakening of the dollar as inflation recedes, geo-political flare-ups, and reopening trade in China are some aspects which have contributed to an increase in gold prices.

But does gold perform well during a recession?

Historically, in five out of the last seven recessions, gold has given positive returns.

In accordance with JPMorgan, oil and gold will drive commodity returns in 2023. They forecasted gold to check $1,860 per ounce, however it has already surpassed that level.

First Published: Jan 15, 2023, 08:54 AM IST

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