Gold, Stocks & the Pandemic: A Powerful Contracyclical Play in Action

by Daniel R. Amerman
Gold Seek

While the use of gold to protect against inflation is well known, it has other investment attributes that are potentially even more valuable, and this is particularly true in times of crisis.

In this analysis, we will examine the relative performance of gold and stocks (as represented by the S&P 500) between early February and late May, as the coronavirus pandemic and the resulting economic shutdowns transformed global economies and markets.

The short term relationship that we will find is an almost perfect match with what fifty years of financial history shows us is perhaps gold’s most valuable investment attribute over the long term, which is its contracyclical relationship with stock prices.

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