The newsletter is a roundup of financial news, investment status, and other financial trivia, giving you the insight you need to manage your money in any economic situation.

General overview

The U.S. jobs report for August showed the economy added 142,000 jobs, less than the 164,000 expected. The report caused concern among Fed Chairman Jerome Powell over the weaker numbers.

Will we be able to avoid recession?

How does gold fare in a recession?

Gold clearly stands out as a safe haven asset in a recession.

Since 1970, there have been 8 recessions. They lasted 11 months on average, and gold achieved an 11% annual return.

Source: Freepik

Central banks have been preparing for some time by purchasing gold

Global net purchases of gold by central banks reached 483 tonnes in the first half of 2024, the highest ever. This is 5% more than the previous record of 460 tonnes set in the first half of 2023.

In the second quarter of 2024, central banks bought 183 tons of gold, which is 6% more than a year earlier.

The biggest buyers were the National Bank of Poland, the Central Bank of India, and the Central Bank of Turkey.

Source: Freepik

The BRICS countries also need gold

The BRICS countries are developing various instruments to create an inclusive international financial system with a newly created monetary currency.

The project being prepared by the BRICS states assumes that the value of the common accounting unit is linked 40% to the value of gold, and the remaining 60% to the basket of national currencies of the BRICS countries.

Current comparison of gold and the stock market

The arrival of recessions is particularly negatively reflected in stock values.

The decline in the ratio between the Dow Jones index and gold is currently in the making again. This ratio shows us that it is much better to hold assets in gold than in stocks at the moment. History also confirms this.

The newsletter “Financial insights and trivia” does not constitute an investment advisory service. Its content does not constitute recommendations to buy or offers to buy, but is intended to inform the public about developments in the financial field. Past returns are not a guarantee of future returns. Please consult a financial adviser for advice.