by Jordan Roy-Byrne, CMT
The Daily Gold
I have written about this topic quite a few times. I am writing about it again today because it will become an extremely important indicator for precious metals within the next 12 months.
Gold has enjoyed a great rebound and has approached its 2020 and 2021 highs. But the stock market has also rebounded and has outperformed Gold strongly in the past few weeks.
The latest rebound in the stock market has removed it from the course of what I deem a mega-bear market. Nevertheless, economic data is slowly getting worse, and a recession and rate cuts are, eventually, likely.
In the meantime, to get a better picture of precious metals’ current standing, we should consult history.
The chart below plots the S&P 500 with our 60/40 expected returns data set, the CAPE ratio (10-year PE Ratio), and CPI Inflation. The yellow is the secular bear markets.