Gold: Rally on the Cards as Economic Downturn Gathers Pace

Source: By Sunshine Profits (Arkadiusz Sieron)

Business activity declined sharply in December. It signals an upcoming recession – a time that suits gold particularly well.

The economic downturn is gathering pace. The flash US PMI Composite Output Index came at 44.6 in December, down from 46.4 in November. It was the sharpest decline in business activity since May 2020, excluding the initial pandemic period, since the Great Recession. The strong decrease in new orders drove the decline in business activity, as inflation and higher interest rates dampened demand.

Both services and manufacturing are suffering. The Flash US {{ecl-106US|Services}} Business Activity Index registered 44.4 in December, compared to 46.2 in November. The fall in the services was the fastest in four months and among the quickest in the series history that started in October 2009.

Meanwhile, the Flash US {{ecl-829USManufacturing PMI}} posted 46.2 in December, down from 47.7 in November. It was the fastest downturn since the initial pandemic period in 2020, which was driven by one of the sharpest declines in new orders since the global financial crisis of 2008-9.

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