That means gold stocks would be sold, as after all they are still equities and therefore would be dumped in a dash for cash.
Not exact matches
After all,
gold historically has shown a negative correlation with
stocks —
meaning when
stocks go down,
gold typically rises, and vice versa.
When
gold prices hit new highs earlier this decade,
gold had a positive correlation to
stocks,
meaning when
stocks rose, so did
gold prices.
This
means that during times of financial uncertainty or
stock market panic, investors often buy large amounts of
gold, pushing its price up.
What that
means is, compared to
stocks,
gold is incredibly undervalued on a historical basis.
It
means that
gold is less vulnerable to volatility in the
stock market than asset classes that are closely correlated to market activity.
This
means that historically,
gold will more often than not move in the opposite direction of
stocks during periods of recession.
About the author: JS Kim is the Managing Director and Founder of SmartKnowledgeU, a fiercely independent research, consulting and education firm that focuses on
gold and silver asset investment strategies as a
means of countering the damaging effects of rapidly devaluing fiat currencies worldwide and price - distorted
stock market and asset bubbles created by Central Bankers.
This
mean reversion has shown that eventually, both
gold stocks and
gold bullion will move back to their historical averages.
They can invest in a variety of safe - haven assets, such as
gold, cash and Treasuries, or can have a dedicated short bias,
meaning they only short
stocks.
That
means that you generally want to buy
gold stocks when they are lagging the price of the metal.
Gold stocks with the
means to increase their output will be in the best position to profit from higher prices.
With all of the uncertainty in the
stock market lately due to high levels of volatility in both February and August, people are going risk - off (
meaning they are shedding risky assets in exchange for more conservative plays) and many people are moving into
gold as a safe haven.
Gold stocks are more volatile than gold bullion, but this added volatility means they can be a better diversifier for financial ass
Gold stocks are more volatile than
gold bullion, but this added volatility means they can be a better diversifier for financial ass
gold bullion, but this added volatility
means they can be a better diversifier for financial assets.
IF you want to research more on the price of
Gold, search youtube for videos by Jim Rogers and David Walker, the former comptroller general — just because
Gold may rise to $ 5000 an ounce does not neccessarily
mean our economy must or will improve to the levels that would see
stock price appreciation — its scary, I know... But its best to be well informed!
That
means even if you've upgraded to Robinhood
Gold, but you've still got some cash that's not invested in
stock, you won't be using
Gold Buying Power.