The concept
Economies move through expansion, peak, contraction, and trough. A recession is a significant, broad decline in activity.
Why it matters
Asset behaviour differs across cycle phases.
How markets interpret it
Yield curve inversions and rising jobless claims are watched as warning signs.
How it may relate to gold
Gold has sometimes performed well around recessions as rates fall — not in every case.
Key takeaways
- Cycles: expansion → peak → contraction → trough.
- Timing them is very difficult.
Knowledge check
Which is a cycle phase?