Is This Why Gold Is Outperforming?

Tyler Durden's picture

Gold is significantly #winning today - well ahead of stocks and the USD after being closely synced with them since the lows last Friday pre-ramp. The question is why? We have an idea. Gold and stocks have been closely correlated on the back of expectations of Fed/ECN unsterilized printing - as gold has taken on the appearance of a risk asset - and rightfully so given the nature of these markets dependence on CBs. However, stocks have outperformed in their own manipulated manner as whatever magic pressure has held gold down continues (as they both rise as simple proxies for more money flooding the system). In a very similar echo of 2009, the last 6-9 months have seen the value of the S&P 500 priced in Gold dip aggressively and then surge back. At current levels we are getting 'rich' in terms of equities priced in real stores of value. And perhaps, just as in 2009, we are about to see real stores of value catch up to equity valuations and continue this outperformance...Gold rallied 23% relative to stocks in the preceding three months.

short-term Gold outperformance...

 

2009 S&P 500 priced in Gold...

and 2012...