Gold Breaks 40‑Year Correlation With S&P 500 — New Regime Emerging?
Gold is now moving in positive correlation with the S&P 500, breaking the long‑standing negative correlation that persisted for decades. This unusual behavior could signal a structural shift in market relationships — or a potential warning for future equity returns.
Correlation Shift: Gold (e.g., GLD) is showing a positive correlation with the S&P 500, rather than the historical negative link seen over the last ~40 years.
Timing Insight: Gold’s breakout began before recent equity highs, indicating correlation patterns may be changing rather than simple co‑movement.
Forward Signal?: If gold continues rising alongside equities, this may reflect evolving investor behavior — and could imply reduced diversification benefits or risk of weaker stock returns ahead.
Long‑term negative correlation between gold and stocks has been a cornerstone of portfolio diversification. Its breakdown may indicate a new regime where traditional asset relationships are changing, possibly driven by macro uncertainty, monetary policy, or investor positioning.
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