Are Stocks Catching Down To Gold?

Tyler Durden's picture

Year-to-date, the EuroStoxx 50 (Europe's Dow) is the best performing of the major asset classes of the developed world - besting the S&P 500 by over 300bps now. What is perhaps more interesting than this apparent dirty/clean shirt bet is that the S&P 500 was outperforming Gold by more than 850bps last week. It appears that since reaching that 2-sigma 'richness' that stocks and gold have begun to converge back to a more normal 'average' spread for the year. Gold remains +6.4% for the year versus 12% for the S&P (with recent historical vol considerably higher in stocks than gold) but the question is - is the long Gold, short Stocks pair due for a renaissance?


S&P 500 performance over Gold YTD - peaks and troughs around 2-sigma...


Stock vol rising relative to Gold vol...


Charts: Bloomberg

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TruthInSunshine's picture

Joe Weaselfail has established that one can't eat the gold ETF, but that both Zynga shares & Uncle Ben's Cotton Fiber are nutricious and delicious.

ball-and-chain's picture

I keep my money under the mattress.

I just don't trust the markets.  Nor do I trust metal.

I'm a fraidy cat.

I don't make bets unless I know I'm going to win.

I wish I had insider information.

asteroids's picture

"Cash is a position." Nothing wrong with it. Waiting for the "right pitch" is smart.

buzzsaw99's picture

gold will catch down to oil eventually

Dre4dwolf's picture

Only way that would happen is if we had a "Dollar Re-Valuation"/new currency atm..... or massive uncontrollable deflation (banks failing all over the place on the same day destroying all the digital FIAT).

GernB's picture

Because a massive and persistent reflation of a market trying to correct, but being prevented from doing so for years, would never lead to massive uncontrollable deflation.

malek's picture

Because the forces of massive uncontrollable deflation would overwhelm even the greatest money printing efforts by the Fed? Dream on, LOL

bank guy in Brussels's picture

Latest from Jim Willie ... arbitrage on the gold price between the COMEX and Shangai, leading to the pressure of collapse for COMEX:

« The new wrinkle to render damage to the COMEX is the arrival of the Shanghai Gold Exchange. The graphic displays the differential, a basis for potential arbitrage. Complex arrangements can be constructed that take advantage of the differential, basically buying the gold metal in New York, finding a way to make it available in Shanghai, where it is sold at a $20 to $30 higher price. The end result of the arbitrage is high volume drainage of gold in New York. ... Finally COMEX based in New York, a major nucleus of corrupt financial markets, has some competition. Expect the spread to widen, the opportunity for arbitrage to grow, and pressure to build for a breakdown. »

Jim Willie - always a great read -

'The Coming Isolation of US Dollar'

fourchan's picture

Just wait until the ponz/fiat hits the fan.

holding the real never improvrished anyone unlike fiat.

Karlus's picture

I think the big question is do you spend money on an expensive phyz hedge thru the cliff, or just let it ride and hope that there is not a big crash.

We are down 150 on the Dow and Gold did not melt off, so maybe a crash in Dow/S&P wont crush Au/Ag any worse than it is...hard to tell as everything has been backwards lately...

optimator's picture

One of these "Kicking the can down the road" they'll give a big kick to a Shue Mine.

GernB's picture

I'm fairly certain that kicking the can down the road to infinity, is currently priced into the market.

devo's picture

It's not worth speculating since a rumor can turn everthing around in seconds.

debtor of last resort's picture

Yes, i heard a rumour there is a shortage of paper silver.

debtor of last resort's picture

On the feds balance under 'other assets'.

optimator's picture

If they ever start printing the trillions they've wired around there won't be a tree in the country to cut for paper.  (I guess we may as well farm thatjpaper printing out to china too)

debtor of last resort's picture

The vultures go where the physical is going. Frontrunning the physical. As usual, after that, transform to fake/fiat, rinse RAPEat

optimator's picture

Seconds?  A lot quicker than that.

GernB's picture

I thought the rule was buy the specilation, sell the rumor.

tooriskytoinvest's picture

Gold And Silver Prices Will Explode In 2013: Global Monetary War Is Intensifying While Ben Bernanke Dumped Nearly $2 Trillion In Excess Deposits On Banks And Mr. Abe Calls For The Bank of Japan To Buy All Construction Bonds Issued By The Government


GernB's picture

Because people always behave exactly as the Fed plans. They would never shun gold in an era of infinite liquidity.

AgAu_man's picture

Is gold Uncle Ben's "Converted (p)rice"?

Magnix's picture

$1500 (or lower) a oz, Im buying bunch of MORE gold coins!

mayhem_korner's picture



Anticipating a dip to buy on is the corollary of shorting.  What will you do if it gets to 2500 without passing through 1500?

TWSceptic's picture

Patience is a virtue, not many investors have it. You should always eliminate as much downside as possible. Gold and silver are still in consolidation, which means there is plenty of time to buy the dips through dollar cost averaging. Not many people expected December to be a bad month, but those who were cautious now have the cash to buy more.

GernB's picture

Isn't that the rule: buy the F*@$ing dips you F&$#ing moron.

Super Broccoli's picture

"stocks getting more volatile than gold"

Come on who needs a chart to understand that gold is a long position and stocks mend to be volatile in today's debt-crisis ZIRP-QEternity+ market ?

balz's picture

Shit will catch to the fan.

optimator's picture

Nothing matters, at least for very, very short term.  "They" will have the market close green. 

optimator's picture

Yazzzzzzir, the PPT 2:40 just went by, right on time.  AmTrac should keep a  schedule like that!  I wonder if what's left of the Little People can take out real money faster than the Bankster can put in digital money?

youngman's picture

Todays little jump was "allowed" buy the Central Bankers or the Fed to put a little scare in the politicians to do something...they will take it away by the end of the year because they cannot have gold show up the dollar ...they need to keep the "faith"....

Ying-Yang's picture

In a word... no

Printing money is soooo easy a caveman can do it.


Bastiat009's picture

No markets make any sense. Nothing is catching up to anything. Everything is political and manipulated. Nothing more, nothing else ...

falak pema's picture

robespierre in high heels!

Golden thermidor.

Banjo's picture

I guess the time frame must be one second ago? Since 2008 gold has been a decent investment. With the added bonus should the central planners fail and destroy faith in paper based money and multitude of debt based instruments you have an insurance policy that pays. (hopefully hehe)

My suggestion is get some gold but don't be ALL IN on anything very risky. 38% of my assets are 60/40 split silver/gold rest is property/cash 1.68% total debt looking to get this to around 12% probably property purchased at fixed rate. If they go hyper may as well pick up a freebie. NB possible risk in prop taxes and people not paying rents. *shrug* no one said it was going to be easy.