In the last update, emphasis was placed on the negative correlation between gold (@GC) and the E-mini S&P 500 (@ES). The recent severe negative price action in gold coupled with mostly stable equity market price action since early March have pushed the negative correlation to an extreme level of -0.86, matching the September 2011 low (see red line on chart). The previous multi-year low was set in 2008 at -0.94 during the credit crisis. Given the historical cyclicality of the relationship between gold and the equity market, it appears that the negative relationship year-to-date may start to reverse going forward.
You can read more of this blog here.
Written by Frederic Palmliden, CMT, Senior Quantitative Analyst, TradeStation.
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