The Street: What Gold's Rise Means for Rates, Equities

Article by Jeff Kilburg in The Street

It has been several years since we have seen volatility in gold. An increase in gold volatility can typically be associated with a change in sentiment and investor behavior.

The precious metal has surged this year on increased demand for safe-haven assets as U.S.-China trade tensions persist and seemingly have impacted global growth.

The World Has Changed

Although the S&P 500 is nearly at the same level in September 2019 as it was in September 2018, money has moved out of global equities and continues to seek shelter.

In addition, central bankers have endured a variety of complex challenges and now have been forced to lean back toward an accommodative stance to combat these undercurrents of waning global growth.

Gold was highlighted on our relative strength matrix back in the fourth quarter of 2018 and has had a steady climb higher all year in 2019.

Gold futures are up 20% through Sept. 10. As gold attempts to reclaim its previous safe-haven title, we have seen ripple effects into other markets. Reverberations in equities as well as the bond market have occurred in 2019, and these moves are in the wake of the grab for gold that started in late 2018.

Historically, as market participants grow worrisome (and there certainly is a lot to worry about these days), gold indeed attracts buyers.

If the Fed continues to articulate the fact that the economy faces "significant risks" over the upcoming quarters, rest assured that investors will continue to make gold glitter.

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