Using momentum indicators, the Nasdaq is overbought and seems to be retreating a bit off of that region. Gold is continuing to move into the overbought region of momentum.
The two are following more of a correlation up until now. This current movement marks divergence, which is what is expected. This coincides with the expectation that Gold and equities will trend in opposite directions.
In other research, it is noted that when there is correlation followed by divergence, it is typically the equity which was over-extended and will retrace back against Gold's more gradual movement. Gold typically keeps pace with inflation.
The two are following more of a correlation up until now. This current movement marks divergence, which is what is expected. This coincides with the expectation that Gold and equities will trend in opposite directions.
In other research, it is noted that when there is correlation followed by divergence, it is typically the equity which was over-extended and will retrace back against Gold's more gradual movement. Gold typically keeps pace with inflation.
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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.