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(Kitco News) - The gold market is ending the week on a roughly flat note as prices continue to trade around $1,850 an ounce. However, it might behoove you to look a little deeper into the precious metals market as physical demand last month saw an extraordinary rise.

The U.S. Mint reported that it sold 147,000 ounces of gold last month, its best May performance since 2010. To remove any potential COVID-19 market disruptions, gold bullion demand is up 400% from its five-year average between 2015 and 2019.

Analysts noted a growing dichotomy in the gold market between physical demand and the paper market. Gold futures prices have been capped because of rising bond yields and a stronger U.S. dollar as the Federal Reserve aggressively raises interest rates through the summer.

For a true picture of sentiment in the marketplace and to gauge investment anxiety, one should pay more attention to physical gold demand. You wouldn't be blamed for feeling a little more anxious as recession fears continue to grow.

This week JPMorgan Chase CEO Jamie Dimon warned investors to prepare for an economic "hurricane."

"That hurricane is right out there down the road coming our way," he said at a conference sponsored by AllianceBernstein Holdings Wednesday. "We don't know if it's a minor one or Superstorm Sandy. You better brace yourself."

Bank of America also noted growing recession threats as energy prices continue to rise, even if it's not the base-case scenario.

"Can the global economy continue to expand with tightening oil supplies? Our estimates suggest that the world can handle a total disruption of just about 2mn b/d of Russian oil without risking a global recession," wrote Francisco Blanch, head of global commodities and derivatives research at Bank of America Securities, in a recent report.

Despite the high level of investor anxiety, some officials note that with a strong labor market and solid consumer spending, the U.S. can still avoid a recession.

In an interview with Kitco News' Editor-in-Chief Michelle Makori, former Bank of Canada Governor Stephen Poloz said there is a "substantial window" to avoid a recession as central banks normalize monetary policies.

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