Goldman Sachs Exchanges
Recession watch: How to hedge now
Apr 9, 2025
Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs, dives into the rising tension around recession fears alongside Senior Strategist Allison Nathan. The discussion highlights gold's evolving role as a reliable hedge, showcasing its significance amid economic uncertainty. Struyven also addresses the bearish outlook on oil prices and OPEC's production strategies, while exploring effective hedging strategies using oil puts. Get ready for insightful market dynamics and practical tips for safeguarding investments!
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Quick takeaways
- Gold remains a strategic hedge against recession risks, despite short-term volatility impacting liquidations and market performance.
- Investors are increasingly utilizing options to hedge against the anticipated decline in oil prices resulting from lower demand and increased OPEC production.
Deep dives
Gold as a Hedge Against Recession
Gold is considered a safe haven asset that can protect investors during economic downturns. Recent volatility in the market forced some investors to liquidate gold positions to meet margin calls, affecting short-term performance. However, the long-term outlook for gold remains bullish, especially as it serves as a hedge against potential recession risks stemming from U.S. policy changes. Current positioning suggests it's an attractive time for investors to enter long gold positions, as the price could rise significantly depending on future economic scenarios.
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