Why gold may continue to rally — as long as U.S. stocks do

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What's causing gold to rally? The U.S. bond market, according to the head of research at Australian broker Pepperstone.

The tech-heavy Nasdaq COMP, -2.26% keeps setting new records, and gold is GC00, -0.55% on a roll, closing at its highest level since 2012. That is not the typical correlation, but then these aren’t typical times.

Gold is viewed by the market as a zero-coupon bond, so when inflation-adjusted Treasury yields head lower, the relative attractiveness of gold increases, Weston points out. He is bullish on gold — $1796 is his next target — but he says the clear risk to gold is higher real yields and, oddly, a selloff in equities could hurt the yellow metal if it causes dollar DXY, +0.44% strength.The recent spike in coronavirus cases was in the spotlight as the governor of Texas urged residents to stay home and let cities and counties impose stricter rules.

 

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When I start seeing these kind of articles I know its too late to go long reversal is imminent.

Pump and dump of Nasdaq 💩

Gold is rallying because the Fed is making it clear that the USD is nothing but a useless piece of paper.

the same thing that made it rally in the past, duh!

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