SSGA’s Maxwell Gold On The Relationship Between Gold And Inflation

Maxwell Gold, Head of Gold Strategy, State Street Global Advisors joined Keith Black, Managing Director, RIA Channel to discuss the performance of gold across regimes of inflation and real interest rates. 

Gold is off to a strong start in 2023, with returns through early May exceeding those of commodity indices, global fixed income, and global equities.1 A key driver of this performance is the continued purchase of gold by global central banks. Central bank purchases of gold have been consistent for the last 14 years, with potential record purchases in 2022 of over 1,100 metric tons.2

 Beyond purchases by central banks, real interest rates are another key driver of gold prices. As inflation weakens the value of the dollar and real interest rates are negative, investors are attracted to gold as a hedge. As rates have risen and inflation has started to decline, real interest rates in the US are now close to zero or slightly positive. 

An unexpected driver of economic uncertainty in 2023 has been the failure of a number of large US banks, which may be a casualty of the speed of interest rate increases over the last year. While investors are concerned about the liquidity of the banking system, gold reminds us that the price of gold tends to be strong during recessions and times of slowing economic growth. 

Gold prices behave differently than the prices of other commodities. For example, energy and industrial metals are highly cyclical, with prices often moving lower during times of slowing economic activity.    

For more insights on this topic:

Investing in Gold with ETFs

Research: Gold as a Strategic Asset Class

Latest Gold Charts  

SSGA’s 2023 Gold Outlook

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

Commodities and commodity-index linked securities may be affected by changes in overall market movements, changes in interest rates, and other factors such as weather, disease, embargoes, or political and regulatory developments, as well as trading activity of speculators and arbitrageurs in the underlying commodities.


1 Bloomberg Finance L.P., and State Street Global Advisors, as of May 4, 2023.

2 World Gold Council, Gold Demand Trends Q1 2023, as of May 5, 2023.


Exp. Date: 5/31/2024