Gold vs Banks
This chart shows the ratio of XAUUSD vs BKX bank index
Gold is typically considered a secure investment in times of economic uncertainty
The KBW Bank Index (ticker BKX) tracks the stocks of 24 major banking companies since the early 90s.
This index serves as a benchmark of the banking sector.
During the Great Financial Crisis of 2007–08 questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on global stock markets. Gold surged in price relative to the bank index.
Another surge in this ratio can be seen during the 2011 Credit Crisis, Standard & Poor's downgraded America's credit rating from AAA to AA+ on 6 August 2011 for the first time. Fears of contagion of the European sovereign debt crisis also increased at this time.
Since 2013 the narrative has been rather consistent confidence in the banks. Gold has lost strength while real yields on Treasuries have risen. During the earnings recession of 2015-2016 fear returned of economic slowdown and rising defaults in junk credit.
Recently with the flattening yield curve fears of slowing economic activity took over markets towards the end of 2018.
Projections of another recession are expected for the years ahead possibly by 2020.
Gold is typically considered a secure investment in times of economic uncertainty
The KBW Bank Index (ticker BKX) tracks the stocks of 24 major banking companies since the early 90s.
This index serves as a benchmark of the banking sector.
During the Great Financial Crisis of 2007–08 questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on global stock markets. Gold surged in price relative to the bank index.
Another surge in this ratio can be seen during the 2011 Credit Crisis, Standard & Poor's downgraded America's credit rating from AAA to AA+ on 6 August 2011 for the first time. Fears of contagion of the European sovereign debt crisis also increased at this time.
Since 2013 the narrative has been rather consistent confidence in the banks. Gold has lost strength while real yields on Treasuries have risen. During the earnings recession of 2015-2016 fear returned of economic slowdown and rising defaults in junk credit.
Recently with the flattening yield curve fears of slowing economic activity took over markets towards the end of 2018.
Projections of another recession are expected for the years ahead possibly by 2020.
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.