Buying some gold as 'insurance"is warranted...We would...argue that given the plethora of negative deposit rates globally, the holding cost of gold is now negligible in many jurisdictions, and therefore gold deserves to be trading at elevated levels versus many other assets.
The bank also suggests that economic weakness may develop and be a positive for gold, but in the EPJ Daily Alert, I have argued that the developing threat over the next 6 months is not the down phase of the business cycle but rather an acceleration in price inflation.
It is a myth that gold goes up during a recession/depression. There were very specific circumstances why gold went up during the Great Depression, that, is FDR manipulated the price higher via Treasury buying (For the benefit of John Maynard Keynes and Bernard Baruch).
Gold should be bought here aggressively but in as protection against accelerating price inflation, not a downturn in the economy.