This week’s Fed FOMC meeting solidified investor hopes for lower interest rates in 2024. I’m not sure why, nothing has changed. But…as a result, both gold and stocks are attempting to breakout. Will this positive correlation hold? Is it a harbinger of good or bad things to come?
Below are three charts comparing gold to the S&P 500- before, during and after the last Great Recession. Note the extreme volatility, magnitude and positive/negative correlations, depending on the business cycle phase. There are no easy answers, but I don’t necessary see the breakout in gold as a good thing for 2024.
As supplemental information, here’s a 60 second video showing more charts from this period.