Gold is bouncing off of support and it is looking like the time to enter into a great risk-adjusted trade. The precious metal is oversold after a couple of month selloff. The downtrend is stimulated by vaccine news and economic recovery.
At the same time, palladium and copper are looking bullish. So there are great ways to diversify your portfolio if you are looking for strategies to invest in non-correlated patterns to the “work-from-home” stocks and the S&P 500 Index (INDEXSP: .INX).
Another indicator that gold could be the trade to make right now is its correlation with emerging markets. Since the election, the Russell 2000 Index (INDEXRUSSELL: RUT) has been leading the market. But recently, money has been moving out of the U.S. as we have seen ETF’s like iShares MSCI Emerging Markets ETF (NYSEARCA: EEM) and Vanguard Emerging Markets Stock Index Fund ETF (NYSEARCA: VWO) outperform the major U.S. indices. When we see these capital outflows, we also tend to see an increase in gold prices.
Gold is a trending trade. What we mean by that is when it moves, it really moves. As demonstrated by history, when a gold bull market presents itself, it is not an investment you want to miss out on.
Gold hit its all-time highs of nearly $2,070 per ounce on August 6. Watch the full interview to see if gold is close to rebounding back to those all-time high levels and why.