There are growing signs that the US economy has entered a slow patch in the first half of the year. From a negative growth reading in the first quarter to a sharp increase in Americans collecting unemployment control, uncertainty about what’s ahead is displayed in the data. In the middle of it all, gold is the top active active with a 22% year to date win.
The case for gold ownership remains strong, and in a late May report, Goldman Sach’s investors urged to buy gold and oil to reduce the portfolio. “After the recent failure of US bonds to protect against equity and rapid increase in US borrowing costs, investors seek the protection of equity binding portfolios. Over the course of 12 months, where real returns were negative for both shares and bonds, either oil or gold has provided positive real returns,” Goldman said.
Let’s dive into the financial image.
Gross domestic product (GDP) growth
In the first quarter of 2025, the US economy went the other way around. After growing in 2024, economic growth was negative in the first three months of 2025 and shrunk by 0.2%, the Bureau of Economic Analysis said in his revision of the government data. Slowing down consumer spending, a downturn in public spending and a decrease of 11.3% in the company’s profits was the blame. With the profits, there is probably little incentive for businesses to increase employment.
Americans who collect unemployment checks hit 3 1/2 years high
The number of Americans submitting new applications to unemployed benefits increased more than expected in late May. The original requirements for state unemployment benefits increased 14,000 to 240,000 for the week ending on May 24, the work department said. The number of Americans collecting unemployment control in mid -May hit the largest number of 3 1/2 years.
This increases the risk that the total unemployment rate could cross up to 4.3% in the May report from May from 4.2% in April.
Sales of spring on ice
Like the spring sales season, kicking into high gear, waiting for home sales fell by 6.3% in April, the National Association of Realtors reported. Watching home sales fell in all four US regions, nam said.
“At this critical stage of the housing market, it’s all about mortgage rates,” said NAR CEO Economist Lawrence Yun. Despite an increase in housing, we do not see a higher home sale. Lower priority rates are important for bringing home buyers back to the housing market. “
Per. On May 29, the interest rate for a 30-year-old fixed interest-priority loan of 6.89%, the third weekly increase, stood, according to Freddie Mac.
Next Stop: Gold for $ 4,000
In the midst of the signs of economic weakness, investors turn to the security of gold. For those investors who wonder if it is too late to buy gold considering the big leap already this year, the short answer is no. Gold is in a strong bull market, and precious metals continue to climb. Goldman Sachs is targeting further gains in gold prices to the $ 4,000 area in 2026, but the company said even a small step away from the US bond market could drive gold well beyond the $ 4,000 level. Don’t wait to increase your allocation to gold; Make your step today.
Photo by Aidan Tottori at Unsplash