Gold to shine amid global recession; soft landing could play spoilsport

But it will lose sheen if the world economy achieves a soft landing

With a year-to-date (YTD) return of 11.4 per cent, gold has outperformed the Sensex (up 4.8 per cent). It has also beaten most debt mutual fund categories whose returns are less than 5 per cent YTD. Its performance in 2023 will depend on how the inflation versus growth dynamic pans out globally.

2022: A good year for yellow metal

The Russia-Ukraine war created geopolitical uncertainty. Supply bottlenecks caused by it and the Covid-19-induced lockdowns in China led to inflation skyrocketing globally.
 

“As central banks hiked interest rates to combat high inflation, both equities and bonds struggled. Gold performed its task