Despite Recession Risks, Jpmorgan Sees Investors Moving To Gold And Tech

JPMorgan Chase & Co. strategists, including Nikolaos Panigirtzoglou and Mika Inkinen, have suggested that investors are likely to favor gold and technology stocks as a buffer against the possibility of a US recession this year. 

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The trade, which is defined as "long duration," involves being overweight on gold, owth stocks such as technology firms, and currencies, while being short on the USD. The strategists stated that the trade is far from crowded in rates due to the highly inverted yield curve. 

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They wrote in a note that the US banking crisis has increased the demand for gold as a proxy for lower real rates and as a hedge against a "catastrophic scenario."

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While JPMorgan notes that the long duration theme seems to have become a consensus in recent months, they consider such a trade to be "relatively attractive" as it would have limited downside in a mild US recession scenario but plenty of upside in a deeper recession.

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