Equities Hammered, Why Isn’t Gold Rallying?
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The question being asked this morning by the pundits, with the markets under pressure, is why hasn’t the safety play sparked a gold rally? The answer is simple, Gold is not a hedge against an equity portfolio, it’s another hard asset that investors should hold in their portfolio.
Since the equities made a top on May 1 they have fallen 4-5%, in the same timeframe Gold and Silver have fallen nearly 2% adding to their losses from of about 5% since their recent high. So where is the protection?
There is none, markets may correlate over time but not always at the same time. The footprints in Gold suggest a move lower to 1220 – 1240 and until that changes and new money buyers show, the metals are going lower. The weakness in Gold this morning with equities getting hammered should be proof enough. Many out there are thing like the Duke Brothers and saying “that’s not right.” But we all know the market is always right