Bloomberg Intelligence Senior Commodity Strategist Mike McGlone has pointed out a growing gap between gold and crude oil, signaling increasing worries about a possible global economic slowdown.
To this end, gold has jumped nearly 46% over the past year as investors seek safe assets amid rising geopolitical tensions and ongoing economic uncertainty.
In contrast, crude oil, often a measure of industrial activity and economic health, has seen minimal gains or losses across different benchmarks. This reflects signs of weak demand, as McGlone noted in an X post on June 18.
The ongoing military conflict in the Middle East between Israel and Iran has also complicated the situation. These tensions have pushed crude prices closer to late-2024 levels.
Although these geopolitical risks have briefly lifted oil prices, they may also increase supply, pushing prices down further and indicating a recession.
“Gold Up, Crude Oil Down — A Global Recession Path – Military escalation between Israel and Iran have lifted crude oil back to end-of-2024 levels, which may incentivize more supply and add fuel to recessionary leanings,” McGlone said.
Gold and oil performance
According to Bloomberg, gold is up 45.9% over the past year and 28.9% year-to-date. In contrast, the WTI Crude Oil Subindex gained only 3% in the same year, with a slight 5.6% rise year-to-date.
Heating oil has fared slightly better, showing a 6.1% return over the last year and a 15.1% gain in 2025. However, other energy benchmarks, such as gasoline and natural gas, have shown weak gains or declines.
At the same time, Bloomberg’s broader energy subindex has been down 2% over the past year, remaining only slightly positive year-to-date. This trend indicates a wider cooling in energy demand.
Overall, this divergence signals a market shift toward safer assets. Gold reflects ongoing investor concerns around inflation, geopolitical tension, and economic instability, while the weak performance of energy markets points to softening global demand, a typical recession indicator.
Gold’s rally has extended into 2025, driven by its safe-haven appeal. The initial surge stemmed from recession fears tied to President Donald Trump’s trade tariffs, with recent gains fueled by rising concerns over a potential world war.
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