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The biggest puzzle regarding gold's rise

Kitco News

Both equities and gold rising and falling together is unusual, said Jim Wyckoff, Senior Market Analyst for Kitco.

Wyckoff spoke to Kitco on Wednesday.

Since the market fall-off in March due to COVID-19 shutdowns, gold has risen 35%. The S&P is also up nearly 50%.

Gold is not playing its usual roll as a hedge, noted Wyckoff. Rather the precious metal has been both rising and selling off with the general market. Wyckoff noted that the price action is unusual.

Looking to the fall, major factors that could move gold are the presidential election and trade tensions. Last month the U.S. and China postponed a planned six-month review of trade progress. The presidential election will be held November 3.

Outside the precious metals, Wyckoff noted copper is having a stellar run. Copper prices hit a recent two-year high partly due to a strong economic recovery in China.

"The copper bulls have the solid overall near-term technical advantage as prices are in an uptrend, [however] the recent higher volatility at higher price levels is a warning signal that a topping process could be occurring," said Wyckoff in a note on Wednesday.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.