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Are stocks and gold inversely correlated?

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Lobo
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Are stocks and gold inversely correlated?

Post by Lobo on Sat 03 Oct 2015, 3:33 pm

Are stocks and gold inversely correlated?

Posted on October 3, 2015 by Martin Armstrong



QUESTION:  Mr Armstrong, is it true that stocks and gold are inversely correlated?
ANSWER: No. That is not a correct statement. There is no such relationship that is static other than assets v money whatever that might be at the moment. Commodities peaked in 1919 and bottomed with stocks in 1932. The all rallied into 1937.

 
There will be times that gold and stocks will trade together as well as in opposition. The relationship is a complex dynamic that actually involves a contango of influences.

Therefore, the answer is NO. There is no constant relationship between gold and the stock market regardless of what promoters will argue. Keep in mind they are selling something. They are not objective analysts.

 
Not even Gold and silver are correlated at all times either. We do not see any steady consistent ratio of silver to gold throughout history.  So there is no relationship that you can ever say is constant. This applies to even two precious metals no less gold and stocks.
The golden rule is simple – assume nothing. The truth always lies in the data.
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wciappetta
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Re: Are stocks and gold inversely correlated?

Post by wciappetta on Sat 03 Oct 2015, 3:52 pm

for now you could say yes however when the FED finally raises prime rate then the association becomes foggy as more people move to treasury bonds. The relationship of opposing forces becomes bonds and stocks with gold tumbling.


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