CFOs Sound Recession Alarm—Equities Lose Favor, Silver Eyes Breakout Behind Gold’s Rise
NEW YORK (March 26) A growing majority of corporate CFOs now expect the U.S. economy to tip into recession before the end of 2025, with 60% forecasting a downturn in the second half of the year, according to CNBC’s latest CFO Council survey.
Business leaders cite aggressive and unpredictable trade policies under the Trump administration as the top external risk, followed by persistent inflation and weakening consumer demand.
Policy instability has left executives uncertain on capital allocation, with 95% acknowledging it is impacting decision-making and just 35% expecting to increase capital expenditures this year.
Bearish Outlook for Equities and Sector Performance
Daily S&P 500 Index
The stock market has struggled to gain sustained momentum, with 90% of CFOs anticipating that the Dow will retest the 40,000 level before approaching 50,000.
For the first time in the survey’s history, most CFOs could not name a sector likely to outperform over the next six months, underscoring deep uncertainty. Although some firms still plan moderate spending increases, the overall tone from corporate leaders remains cautious.
Notably, only 7% of CFOs expected a 2025 recession just one quarter ago, highlighting a rapid deterioration in sentiment as the economic outlook becomes murkier.
Gold Hits Record Highs as Investors Seek Safety
Daily Gold (XAU/USD)
Gold has emerged as the leading hedge against economic volatility, climbing to an all-time high above $3,057 per ounce in March. The S&P 500-to-gold ratio has declined to 1.9, its lowest level since 2020, signaling a rotation into safer assets.
Strategists from State Street and SentimenTrader point to increased ETF inflows and central bank buying as primary drivers, while investors reduce equity exposure in favor of lower-volatility holdings. Weakening consumer confidence and geopolitical concerns continue to reinforce demand for physical gold.
Silver Primed for Breakout on Supply Tightness and Industrial Demand
Daily Silver (XAG/USD)
While silver has lagged gold’s performance, analysts see it as significantly undervalued, with the gold-to-silver ratio still above 90—well above the historical average. A fifth consecutive global supply deficit is forecast for 2025, with demand from green technologies and industrial sectors remaining firm.
Silver currently trades near $33.60, but forecasts suggest a move above $40 is likely, with some bullish scenarios calling for prices as high as $75–$100 on a potential supply squeeze.
Market Forecast: Defensive Bias with Focus on Precious Metals
Given rising recession expectations, policy instability, and subdued equity sentiment, the near-term market outlook remains bearish. Investors are increasingly favoring gold and silver as core portfolio hedges.
A balanced strategy prioritizing precious metals exposure, while selectively identifying undervalued equity sectors post-correction, is advisable in this environment of elevated economic and geopolitical risk.
FXEmpire
