There are several experts and individuals talking about gold and how it is currently in a new bull trend. However, gold could be in a secular bear market. According to a recently released report, Gold is not in a real bull market yet. For that to happen, the precious metal would have to outperform the S&P 500.
The store of value used by the world didn’t make an all-time high in around eight years, which is something very important to understand in which situation gold currently is.
However, it will be possible for investors to place their funds in this asset when it enters a real bull market. This would allow people to make “a lot of money,” according to the report.
One of the reasons to take into account why gold is not yet in a bull market is related to the fact that the precious metal has never been in a bull market without outperforming the S&P 500. This was only possible only between 1985 and 1987.
While gold is currently close to reaching a new all-time high, when the asset is compared to the S&P 500, the bull market seems far from happening.
In nominal terms, gold has been performing quite well since 2016. Nevertheless, it has now performed well against the stock market.
It is also worth mentioning that gold is already making new all-time highs against foreign currencies. This didn’t happen during the ’90s when gold’s price was experiencing a similar pattern as now.
The report shows that it is very important to understand how gold behaves against the U.S. stock market. Taking this into account it is possible to understand where there is a trend bottom that would show investors when to invest in Gold.
If the current bottom is confirmed when comparing gold to the S&P 500, with further positive fundamental developments, the precious metal could move towards the previous high of $1,900.
According to Jordan Roy-Byrne, there is a scenario in which gold can simply perform well even if the S&P 500 continues its bull trend.
Nevertheless, the author considers that gold has to outperform the US stock market before it can start a multi-year bull run and hit new all-time highs.