Charlotte Business Daily

How do precious metals do in a recession?

With the stock market not looking so good (depending what happens tmrw and the rest of the week) I was just wondering how do precious metals tend to do during a recession? Im talking about actual bullion not stocks in the precious metal industry.

Public Comments

1. You do not want to own precious metals in a recession. During a recession, the Fed tends to lower interest rates (making money cheap) to spur the economy into recovery. Cars and housing tend to well during this time because loans are cheap. It is when the Fed is close to raising the interest rate to stop inflation that you want to start buying gold. It is when inflation is high and money is expensive that people own gold because it is more stable.
2. During a recession there is only one good investment. T-bills. The second best investment is cash. All others are not so good.