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Gold’s Relationship With Stocks Hits All-Time Low

Gold's Relationship With Stocks Hits All-Time Low

Gold and stocks don’t always act like the best of friends, but as of late, they’ve become the worst of enemies.

In the 60 sessions through Wednesday’s close, the correlation between the daily moves of gold futures and the S&P 500 has been negative 0.63. Since correlations run from 1 to -1, with 1 indicating perfect correlation, 0 indicating perfect indifference, and -1 indicating perfect opposition, this shows a very strong inverse relationship between the two assets.

If all one knew about the market in a given session is that gold had risen, it would be a decent bet that the S&P fell.

As a matter of fact, -0.63 is the lowest ever correlation between gold and stocks, based on a CNBC analysis of FactSet data going back to 1984. Indeed, the average correlation over the entire 32-year period is just -0.06.

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