I am comparing the relationship between Gold, the Nasdaq and the US Dollar.
Since 2000, here are approximate returns for each;
Gold up 550%
S&P up 254%
DOW up 364%
Since 2020:
In the past 5 years, this shifted slightly with Gold up about twice as much as the Nasdaq.
Since 2024:
In the past year, Gold has outpaced the Nasdaq 5:1 on gains.
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The dollar had three notable high gain/peak years in;
1985
2002
2022
Those peak dollar years occurred when the market was in a correction phase, selling off before the next rally, and followed a bull market rally. After each of those peak dollar years, a market rally occurred that lasted from a few months to a few quarters with substantial gains. Typically when the dollar is strong, gold prices have been suppressed. If the dollar weakens, it may allow Gold to continue a rally. We may have already seen that market rally, which just peaked in December 2024 after the dollar peaked in 2022.
If the dollar continues to lose strength, Gold prices will likely continue to rise.
from Bloomberg 4 days ago:
"A dollar gauge is on track for its worst performance during the first 100 days of a United States presidency in data going back to the Nixon era, when America abandoned the gold standard and switched to a free-floating exchange rate."
The correlation between Gold and Equities lacks any data to support, especially considering the past 20 years of market data. Gold's relationship with the markets is an algorithm that includes the US Dollar. If the dollar is strong, we see Gold prices suppressed. When the dollar is weak, we see Gold prices unlocked and free to make gains. That's where Gold is now.
Forecast:
The only information available to base a forecast for Gold pricing would be the US Dollar based on the economic relationship of the USD and Gold. Since the dollar has pulled back slightly and appears to be in a slightly downward trajectory, it is expected that Gold prices will continue to gain, although likely at a slower rate.
Since the Dollar peaked in 2022, followed by a bull market for several quarters after that event, the Nasdaq is likely headed further into correction territory followed by a consolidation phase before beginning another bull market. The Nasdaq is currently in the second annual financial quarter of a pullback that will likely last several more quarters. This market correction began in December 2024.
Since 2000, here are approximate returns for each;
Gold up 550%
S&P up 254%
DOW up 364%
Since 2020:
In the past 5 years, this shifted slightly with Gold up about twice as much as the Nasdaq.
Since 2024:
In the past year, Gold has outpaced the Nasdaq 5:1 on gains.
__________________________________________________
The dollar had three notable high gain/peak years in;
1985
2002
2022
Those peak dollar years occurred when the market was in a correction phase, selling off before the next rally, and followed a bull market rally. After each of those peak dollar years, a market rally occurred that lasted from a few months to a few quarters with substantial gains. Typically when the dollar is strong, gold prices have been suppressed. If the dollar weakens, it may allow Gold to continue a rally. We may have already seen that market rally, which just peaked in December 2024 after the dollar peaked in 2022.
If the dollar continues to lose strength, Gold prices will likely continue to rise.
from Bloomberg 4 days ago:
"A dollar gauge is on track for its worst performance during the first 100 days of a United States presidency in data going back to the Nixon era, when America abandoned the gold standard and switched to a free-floating exchange rate."
The correlation between Gold and Equities lacks any data to support, especially considering the past 20 years of market data. Gold's relationship with the markets is an algorithm that includes the US Dollar. If the dollar is strong, we see Gold prices suppressed. When the dollar is weak, we see Gold prices unlocked and free to make gains. That's where Gold is now.
Forecast:
The only information available to base a forecast for Gold pricing would be the US Dollar based on the economic relationship of the USD and Gold. Since the dollar has pulled back slightly and appears to be in a slightly downward trajectory, it is expected that Gold prices will continue to gain, although likely at a slower rate.
Since the Dollar peaked in 2022, followed by a bull market for several quarters after that event, the Nasdaq is likely headed further into correction territory followed by a consolidation phase before beginning another bull market. The Nasdaq is currently in the second annual financial quarter of a pullback that will likely last several more quarters. This market correction began in December 2024.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.