So if you're new to SMT, Persona, P4, P4G, or just curious about some of the inner workings of the difficulty settings and want to know what difficulty is "best" this is a guide you should find interesting. I'm going to cover how each difficulty works and what difficulty is best for you regardless of skill level.

In both custom and default difficulties, there are six settings that determine the difficulty level.
Damage Dealt:
- Self-explanatory, lower means harder,
Damage Taken:
- Self-explanatory, higher means harder.
XP Recieved:
- Self-explanatory, lower means harder,
Yen Recieved:
- Self-explanatory, lower means harder,
Retries in Dungeons
- If on, when the player dies they can resume the game from the start of the floor they were on during death.
Retries in Battles
- If on, when the player dies they can resume the game from the start of the battle they were on during death

In the original Persona 4, the only change between the three difficulty settings was the first two options available. That and on easy you received an item that was a full team revive and full restore that could be used five times throughout the game. If Persona 4 Golden followed these same rules, the recommendation would be easy.

Easy - For people who don't really want to interact with combat too much but want to experience the story and characters. For "Casuals", younger people. and people who aren't into JRPGs.
Medium - The default difficulty for the majority of people. "The way it was meant to be played."
Hard - For people who want a challenge, but not a good challenge, just a tedious one that one-shots you a lot.

For the record, I am somebody who likes to play my games on hard and loves a good challenge, I have beaten SMT3: Nocturne on Hard, but Persona 4's Hard Mode isn't actually hard, it's just kinda cheap. I was very excited to hear that Golden would have a higher range of difficulty settings. The problem is the settings themselves.

Damage Dealt: More
Damage Taken: Less
XP Recieved: More
Yen Recieved: More
Retries in Dungeons: Yes
Retries in Battles: Yes

- The game at absolute easiest, it all but plays itself. You can 1-2 shot most early enemies just setting it on auto-battle and will level up extremely quickly. I haven't explored it fully but you might actually be capable of a minimum possible battles run of some kind on this one where you just fight bosses and run from everything else.

Damage Dealt: More
Damage Taken: Less
XP Recieved: Normal
Yen Recieved: Normal
Retries in Dungeons: Yes
Retries in Battles: No

- The game on easy, but not completely trivial. Basically the same as it's equivalent in 4 Vanilla.

Damage Dealt: Normal
Damage Taken: Normal
XP Recieved: Normal
Yen Recieved: Normal
Retries in Dungeons: Yes
Retries in Battles: No

- All settings at a default. The player takes and deals standard amounts of damage, receives standard XP and Yen, and upon death can retry from the start of the current dungeon floor they are on when they die.

This is the most standard difficulty and serves as the default numbers that the effects of higher and lower difficulties are checked against. Largely unchanged from 4 Vanilla aside from It's the most balanced way to play the game and probably best for blind playthroughs.

Damage Dealt: Less
Damage Taken: More
XP Recieved: Normal
Yen Recieved: Normal
Retries in Dungeons: Yes
Retries in Battles: No

- The game on hard, but not completely ballbusting. Basically the same as it's equivalent in 4 Vanilla.

Damage Dealt: Less
Damage Taken: More
XP Recieved: Less
Yen Recieved: Less
Retries in Dungeons: No
Retries in Battles: No

- This difficulty is miserable. I do not recommend that anybody play it. For some people, this may be the "real shin megami tensei" experience and I'm sure some absolute cretin will be preaching how it's the only way to truly enjoy the game in the comments, but do not play this. You will not beat the game without a lot of grinding, and because you get reduced XP and Yen, grinding is an absolute ♥♥♥♥♥♥♥ chore. For every hour grinding on hard, you need to spend 3 or 4 to get the same results and that's WITHOUT any reloading you may need to do.

So here's my issue and it's one I've heard other people who want a challenge echo. Hard Mode is easier than 4's hard and the game overall is easier with shuffle time being massively buffed. However, Very Hard is torture that nobody should play. Luckily, Atlus actually accounted for this.

Damage Dealt: Less
Damage Taken: More
XP Recieved: Normal
Yen Recieved: Normal
Retries in Dungeons: No
Retries in Battles: No

- Easy is right for you, Very Easy if you really don't like JRPGs and want to turn the dungeon crawling into an idler.

- Medium, why did you need this guide to tell you that?

- Hard or my Custom Hard

- Very Hard, also eat my ass you waste of skin.