Gregor Stuart Hunter, Bloomberg News
(Bloomberg) — Gold and U.S. stocks could part ways during a fresh round of market turbulence, ending a three-month period in which their returns were almost yoked.
Renewed deterioration of the global economy and more lockdowns to prevent Covid-19 from spreading should hit equities but leave gold standing, according to Societe Generale.
“While the correlation between gold and equities has turned unambiguously positive since the March lows in risk assets, another serious bout of risk aversion could cause the performances of equities and gold to diverge,” SocGen strategists including Jitesh Kumar wrote in a note dated Aug. 4, echoing comments from other strategists.