What Gold's Massive Rally Tells Us About the Stock Market, Crypto Coins News

• Gold and stocks are rallying in lockstep with each other.
• Appetite for gold is driven by safe-haven demand despite surging stock prices.
• Analysts believe the gold bulls still have the upper hand in 2019.

This week, theS&P 500 achieved a new all-time highfollowing a positive jobs report. Yet, the gold pricehas approached levels unseen since 2013. ******

Stock Market up BIG! Record highs for S&P 500 and NASDAQ. Enjoy!

– Donald J. Trump (@realDonaldTrump)November 1, 2019

Gold, along with traditionalsafe haven assets like bonds, have continuously been on the riseover the past two weeks, amidst fears of a possible recession despite the strong performance of the equities market.

Theupside momentum of goldduring an extended stock market rally indicates that investors are not fully convinced fundamental issues including geopolitical risks are resolved.

Why gold is rising amid S&P bull market

According to Citigroup investment strategist Ken Peng, thestock market selloff of Q3was caused by an overreaction from investors.

Peng noted thatinvestors feared slowing global economic growth, Brexit and the trade war, which added to international geopolitical risks and led to an increase in demand for safe havens.

He said:

“Investors were panicking about the trade war, global growth and Brexit in the summer and now they realized the situations aren’t that bad. I’d recommend investors to focus more on equities and high-yielding bonds in the coming three to six months. ”

Hence, therecent momentum of the S&P 500and the rest of the US equities market has been widely attributed to the outflow of capital from the bond market asrecession fears cooled.

However, the rising gold price suggests that while investors are moving towards riskier investments, they are not disregarding thepossibility of a selloff in the markets.

Gold bulls have the upper hand: investment firm CEO

Following a 7% increase in price within merely two months since August, Scott Bauer, CEO at Prosper Trading,told Bloomberg that gold bulls have the upper handin this market.

According to Bauer, multiple Fed rate hikes and the gradual unwinding of the U.S. dollar have created an ideal environment for gold to spike.

He said:

“The Fed just cut rates again and signaled unless inflation picks up, the likelihood of any rate hike is not in the cards. Bond yields have been ranged bound and the dollar has declined off of its recent highs. The lower interest rates go, the more valuable gold becomes as the only true store of wealth. ”

With key markets in Asia like China, Hong Kong, Japan, and South Koreastruggling to recover from third-quarter woes, the gold price could sustain its upward trend in spite of the S&P momentum .

Last modified (UTC): November 2, (2:) ************************************************************************* (PM)