Gold and macro environment, page-884

The macro environment can have a major impact on precious metals prices and I keep a close eye on the macro. If the US has a recession we will most likely see a big increase in the POG as rotation away from tech and USA stocks gains momentum with one beneficiary being inflows to gold and gold stocks. However we could see a significant fall in POG before it rises much higher (this path has happened many times in the past most notably the GFC).

Now we have the Atlanta Fed (see images below) projecting a sharp 1st quarter 2025 fall in GDP of minus 2.8%. The adjustment is due to consumers not spending and falling new homes and renovation construction.

This is the lowest projection for at least 5 years (see images).

I am not convinced the US will have a recession this year but we still may see a significant fall in stocks if growth is below previous years say 1% or lower which should still see POG rise above $US3,000. I am always a bit suspicious of predictions that suddenly change significantly. Trumps tariff and cost cutting agendas are bad for the economy and if fully implemented will make a recession more likely in 2025 or 2026. But with cuts in immigration they will keep inflation high and stagflation may result.

The NASDAQ is close to 9% below its peak in December and may soon be in correction territory.
10yr bond bond yields have fallen from 4.8% in Jan 25 to close to 4.1%