Market Watch: Buckle Up! When Oil and Gold Trade Like This, It Usually Spells Doom for the Market

June 04, 2019

Article by Shawn Langlois in Wall Street Journal Market Watch

Oil prices are hovering around bear-market levels amid concerns over slowing global growth and the potential for tariffs to sap energy demand.

Gold meanwhile, has been heading in the other direction. Some of the same factors keeping pressure on oil have led gold to a five-session winning streak that’s propped up prices to levels not seen in more than a year.

This combination of rising gold and falling crude — rare as to the extent of the divergence — has delivered to some nasty consequences for the broader market over the years, as you can see by this illustration.

“Only three other times in history precious metals surged while oil plunged! All of them happened during severe bear markets and recessions,” he explained on Twitter this week. “Buckle up, folks.”

To read this article and view the related chart in Wall Street Journal Market watch, click here.

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