Has the Global Pandemic Unexpectedly Changed the Relationship Between Gold and the Market?

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The S&P vs. GoldThe S&P 500 Futures topped out on February 20th at an all time high of $3397.50 before falling into a downtrend as a result of the coronavirus shutting down sections of the world economy beginning with China. On the same day Gold reached a high of $1623.74 and rallied for 2 more days before declining and entering a sideways market. The S&P 500 Futures reached its lowest point of this short-term downtrend on March 23rd closing at $2220.50 (down 34.6% from its Feb. 20th high), while Gold closed at $1554.17 (down 4.3% from its Feb. 20th high). More recently when the S&P 500 Futures rebounded reaching a high of 2750.00 on April 7th (up 23.9% off the close of March 23rd), on the same day Gold made a high of $1678.60 (up 8.01% off the close of March 23rd). Looking at the daily movements of the S&P 500 Futures front contract compared to Gold from February 20th, to April 7th, it appears that Gold rises and falls at approximately the same time as the S&P 500 Futures. If Gold is truly a safe haven against a falling market, one would expect Gold to be down as the market rallies and up when it declines, roughly speaking. However, the price relationship between the two instruments in the past 34 trading days may be suggesting a change in their correlation.
Related tags: Gold Indices Coronavirus

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