If the key word here is “always,” then no, gold prices do not always go up during a recession. That said, gold has a decent history of performing well during economic uncertainty, such as a recession. Schroders, a global investment manager, recently reported that gold and gold equities have done well during 5 of the last 7 recessions. While interest rate hikes are often used to combat inflation, they can also devalue local currencies, such as the dollar. When this happens, it’s common to see gold prices go up relative to the currency in question.
It’s important to remember that gold prices are determined on a global scale, and the economic state of one country isn’t always powerful enough to drive gold prices up or down. Supply and demand are the only true factors that directly affect gold prices. If the world decided tomorrow that it was done investing in gold, then prices would plummet. So, while gold prices historically go up in times of recession, that kind of performance is never guaranteed, as other factors are always at play.
