This week, Zacks Equity Strategist Mayur Thaker, CFA, discusses:

• The relationship between gold and excess liquidity. Contrary to popular opinion, Mayur suggests gold behaves differently from the consumer price index and reflects forward-looking liquidity. By looking at trends in the federal government budget alongside past gold prices, Mayur believes gold can forecast the direction of a future government deficit or surplus.

• Mayur’s data shows that as of August 2024, the fiscal deficit is the most severe in any non-emergency year. He believes this alongside rallying gold prices over the past year may indicate increasing fiscal deficits over the next 12-24 months. Mayur also suggests this may signal an upcoming recession or increasing deficit spending.

• He wraps up the discussion by strongly advocating caution to investors and urges a repositioning of assets into quality businesses that comprise the recession-resistant Zacks Earnings Certain Portfolio. Some of these companies include Clorox, Costco, Novo Nordisk, and more. Don’t miss this valuable analysis.