Gold pushes to higher ground ahead of headline inflation data
Bloomberg’s McGlone sees gold, stock market parallels between 2001 and 2022

(USAGOLD – 9/13/2022) – Gold continued its push to higher ground this morning as markets await the headline inflation data due shortly. It is up $4.50 at $1732. Silver is up 9¢ at $19.94. Bloomberg commodity specialist Mike McGlone thinks the Fed’s tendency to hike rates until something breaks is “deflating” the stock market, a circumstance that might give it pause.

“An elongated period of gold underperformance and stock market outperformance may be reversing,” he writes in a recent series of tweets.on where the metal might be headed. “This narrative from 2000 is gaining traction in 2022. (See chart below.) The metal is down about 6% vs. about a 15% decline for the S&P 500 to Sept. 9. In euro and yen terms, gold has advanced around 7% and 17%, which emphasizes its store-of-value attributes.… Our graphic shows the gold-to-s&P 500 ratio potentially bottoming from its enduring support level since 2002, with the Federal Reserve’s tightening being the key difference to the last time the stock market dropped from a similar stretched condition in 2021.… The Fed started easing in 2001 as equities deflated and helped to buoy gold. We see parallels brewing in 2022.”

Gold and the S&P 500
(%, 2000-2004)
overlay line chart showing gold and stocks 2000-2004
Chart courtesy of TradingView.com

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