How Does Gold Behave in an Economic Recession?
- ccancino3
- Apr 3
- 3 min read
The price of gold continues to rise in the first quarter of 2025 as recent US trade policies raise concerns in the global economic community. Find out why the price of gold tends to rise in times of economic and financial storms. The imposition of tariffs by the United States government, as well as the increase in tensions with key partners such as China, Mexico, Canada and the European Union, create nervousness in global financial markets
These events drove gold to new record levels. In March 2025 the price of an ounce of gold reached a historical record, exceeding US $3,000, driven by the search for security in the midst of economic volatility. Persistent inflationary pressures, coupled with trade tensions and a sustained increase in demand for gold by Central Banks, create the ideal environment for the price of gold to continue to rise.
Factors That Increase the Risk of Recession
In March 2025, Bruce Kasman, chief economist at J.P. Morgan increased his probability that the United States will enter a recession in 2025 from 30% to 40%. Kasman noted that the possibility of a recession could increase if Trump's threats of reciprocal tariffs materialize in April. These measures could negatively affect investors’ confidence, which would in turn impact economic growth.
At the same time, during the first quarter of 2025, the growth forecasts for key economies such as Mexico and Canada have been cut, setting off alarms in global markets. Concerns about a possible recession have caused significant falls in stock markets. From January to March 2025, the S&P 500 index experienced its worst quarter since 2022, reflecting the growing investor anxiety over the trade policies of Trump’s administration.
Economic Growth Projections and Behavior of Gold
J.P. Morgan has adjusted its yearly US GDP growth forecast down to 2%. Other banks, such as Goldman Sachs and Morgan Stanley, have also revisited their estimates downwards, placing them at 1.7% and 1.5%, respectively.
How does gold behave in an economic recession?
Gold has demonstrated a great ability to preserve its value during various economic downturns. Historically its behavior has been positive, reinforcing its role as a strategic investment asset:
2008-2009 Recession (Global Financial Crisis)
This recession, caused by the collapse of the mortgage market in the United States and the bankruptcy of large financial institutions, led gold from approximately US$800 per ounce in 2008, to exceed US$1,100 in 2009; an increase of more than 37.5% in just one year. Demand for a safe asset like gold skyrocketed amid the global banking collapse.
2020 Recession (COVID-19 Pandemic)
The abrupt shutdown of the world economy caused an unprecedented recession. Gold went from trading at around US$1,400 in 2019, to reaching its all-time high until then, in August 2020, exceeding US$2,000 per ounce. This was driven by massive monetary stimulus, near-zero interest rates and inflation fears. In just over a year, gold appreciated in dollars by more than 42%.
Technical Recession of 2022 (Post-Pandemic and Inflation Adjustments)
Although short-lived and less severe, the US GDP contracted for two consecutive quarters in 2022. Gold showed resilience by remaining above US$1,800, partly thanks to the inflationary uncertainty and the geopolitical tension stemming from the war in Ukraine.
In times of recession, investors look for security. Economic uncertainty increases the demand for tangible assets such as gold, which acts as a silent lifesaver during economic recessions and financial crises.
Protect your Money
Aktagold's mission is to help people around the world protect their money from the economic and financial instability of their countries of origin by giving them access to saving in physical gold, safely stored in Canada’s most secure vaults, an option that used to be reserved only for the wealthiest ones.
Contact us and learn more about how to protect your wealth by saving in gold.