Gold's recent price advance had more to do with investor's perception of dollar strength than a flight to safety after equities took a plunge, said Rick Rule, CEO of U.S. Global Investors.
"My own belief is that popular perception of the continued purchasing power of the dollar and strength in the U.S. economy declined a little bit which caused U.S. equities to decline," Rule told Kitco News on the sidelines of the Silver & Gold Summit in San Francisco.
Rule noted gold reacted more to dollar weakness than to stocks.
Additionally, short-term traders have a tendency to flock to higher growth assets, like cannabis and cryptocurrencies.
"The idea that there was going to be flow of funds from equities to gold, I think, belies the fact that traders go to hot or momentum-based sectors, so my suspicion is something like the cannabis stocks would have done better in circumstances like that because that's where the hot money is," he said.
This article was written by a staff member of TheStreet.