DelMorgan and Company Highlights Gold’s Role in Recession-Proof Portfolios Amid Global Market Uncertainty
LOS ANGELES, CA – May 7, 2025 – DelMorgan and Company, a global investment banking firm known for its deep strategic insights, has reaffirmed the critical role of gold in portfolio defense strategies amidst rising global economic instability. As investors face increasing volatility and recessionary signals, DelMorgan’s latest review of market conditions emphasizes gold’s exceptional performance in 2025—surpassing $3,000 per ounce—as a strong hedge against economic downturns and geopolitical disruptions.
Mounting concerns around recession are reflected across leading economic indicators. Forecast models from a regional branch of the U.S. central bank now anticipate a 2.4% contraction in the first quarter. Major financial institutions have raised recession probability estimates—some up to 60%—as signs intensify. Notably, the yield curve, a historically reliable recession predictor, has steepened markedly in early 2025 after a long inversion, pointing to heightened economic stress.
Investor anxiety has also grown amid the U.S. government’s latest trade initiatives, which propose a 25% tariff on steel and aluminum imports, along with retaliatory tariff alignments. These inflationary pressures, coupled with policy-induced slowdowns, echo a stagflationary environment similar to the 1970s—when gold delivered some of its strongest historical gains.
Gold’s historical behavior during downturns strengthens its case as a portfolio anchor. During the Great Recession (2007–2009), gold rose while equities plummeted. During the inflation-scarred 1970s, gold delivered annual returns exceeding 35%. In Q1 2025, gold-backed ETF inflows surged to $12 billion—the highest quarterly increase since 2020—signaling renewed institutional confidence.
Policy shifts by central banks are also supporting gold’s momentum. Historical data shows that rate-cutting cycles, such as in 2008 and 2020, significantly propelled gold prices. Futures markets now price in 75 basis points in rate cuts by late 2025, contributing to a favorable macro environment for the metal. Analysts anticipate continued monetary easing, further reducing opportunity costs and weakening the dollar—both historically bullish for gold.
Despite gold’s rally, current ETF allocations remain below historical highs. With global ETF gold holdings at 2.3%, there remains considerable room for institutional reallocation should market uncertainty deepen. A leading global bank’s prediction of $3,000 gold by Q4 2025 has already materialized, driven by increased central bank purchases, Chinese consumer demand, and intensifying geopolitical tensions.
Contrary to assumptions, gold has outperformed broad equity markets in early 2025, confirming its role as a safe-haven asset. Its negative correlation with equities during crises provides essential diversification. As volatility escalates, strategic gold allocations offer investors a vital cushion against broader market swings.
DelMorgan and Company continues to advise clients on building resilient portfolios tailored to today’s economic realities. With decades of cross-border advisory experience, DelMorgan is uniquely positioned to help investors navigate uncertainty with sophisticated asset strategies centered around proven defensive holdings like gold.
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