Gold has been on a roll lately, even as stocks hit all-time highs. Here is what it all means.
Even Safe-Havens Are Rallying
December 27 (King World News) – Jason Goepfert at SentimenTrader: “Gold is most often thought of as a safe-haven asset, best used when other markets are rocky. That hasn’t been the case lately, though, with the metal pushing to a 2-month high even as stocks tickle record highs…
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Gold is typically thought of as a safe-haven asset. If that’s the case, then it’s odd that it’s rallying along with the impressive gain in stocks lately.
Stocks have been creeping to new record highs almost daily, yet gold has quietly also rallied, and just closed at the highest settlement in almost two months. This kind of behavior makes investors think that something is off, usually with the undertones that this is a bad sign for stocks.
It’s not like the two assets are perfectly inversely correlated, because they’re not. They often go through periods of rising or falling together…
Gold Rallying As Stocks Hit All-Time Highs
It wasn’t such a bad sign for stocks – the S&P rose going forward across most time frames, even if its average return tended to be a bit below average.
For gold, though, it was an issue. When it rallied while stocks were hitting record highs, it rarely managed to keep going for long. Gold bugs have to hope that it’s finally embarking on a long-sought trend change.
King World News note: The bottom line for gold bulls is they are looking for signs of a long term trend change. One example would be the massive breakout above $1,400-$1,450 level earlier in the year. A break above $1,580-$1,600 would be a further confirmation. And this is another example of why Jason Goepfert is the best in the world at what he does — providing actionable market data. To subscribe to SentimenTrader CLICK HERE.
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