With gold pulling back from the $1,300 level, Michael Oliver, who is well known for his deadly accurate forecasts on stocks, bonds, and major markets, just issued this update on gold and the S&P 500.
The Spread: S&P 500 vs Gold
January 23 (King World News) – Michael Oliver: S&P500 suffered massively versus gold over the past twenty years (1999 to 2019)…
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Michael Oliver continues: However, since 2011 as gold peaked in its net trend, the S&P500 has gained back about a third of what it lost in the prior decade in relative performance. But that spread action (favoring S&P500) is now gaining some age.
There are arguably three upward waves on the momentum chart. The third wave peaked in September 2018 just short of the peak oscillator readings of 2014—meaning a non-confirmation of the spread chart highs. Since then the spread has dropped like dead weight. It erased nearly three years of relative outperformance in three months (see chart below).
S&P 500 vs Gold Spread (Monthly):
Watch For Bullish Multi-Year Buy Signal For Gold
This Signals Gold Will Again Be The Asset To Hold For Years
Notice that the collapse held on the zero line last month—where its lows were in 2016. Getting a bit of a bounce this month. If going forward we see a spread close that is below the rising 36-mo. avg., then the S&P’s relative performance recovery effort is shutting down. Gold will again be the asset to hold for the interesting years that are just ahead.
***KWN has released the remarkable audio interview with Egon von Greyerz and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
ALSO RELEASED: MAJOR WARNING: “The Seeds Of The Next Financial Crisis” Have Already Been Sown CLICK HERE TO READ.
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