Dear Eoin-Hope you are doing well. You often mention in your daily videos that you expect a recession within the next 18 months and that you also expect gold to move considerably higher in a not too distant future. If I am not mistaken in the previous recessions gold went down considerably. I know timing is always very difficult if not impossible, but do you expect gold to break upwards before the recession or after the recession. As always thanks very much for your wonderful service. Best rgds

Eoin Treacy's view

Thank you for this important question. Gold began its bull market in 2000/01 when the Nasdaq was topping but it collapsed in 2008 during the credit crisis as contagion selling forced investors to sell anything they had a profit in. That suggests gold need not collapse during a recession but it will depend on how tight credit conditions become and how heavily positioned investors are in precious metals.
It's worth considering that the Dollar was very strong in the 1990s because the USA was running surpluses. The currency’s reversal supported gold’s revival. In 2008, the Dollar was bottoming after seven years on the downside. That’s the critical difference.

The outlook for gold depends on negative real rates getting more negative and the Dollar trending lower. Both those conditions will be heavily influenced by the Federal Reserve’s interest rate policy. I think it is likely gold will break out to new highs before a recession is confirmed. Gold’s big advances tend to happen in short periods of time and it tends to spend a lot of time ranging in between. I don’t see that changing.