Against the backdrop of geopolitical tensions, inflationary concerns, and uncertainty over the results of the US presidential election, risk-averse sentiment has risen, and coupled with strong global central bank demand, this has driven gold prices to hit new highs this year, breaking through the $2,600 mark, with a gain of nearly 30% so far this year.
Robert Kiyosaki warns that rising gold prices are detrimental to the stock market
In this regard, Robert Kiyosaki, the author of the best-selling investment book "Rich Dad, Poor Dad", recently stated that gold prices have hit a new high, and those who have invested in gold since 2000 have performed well, and he is one of them.
However, Robert Kiyosaki pointed out that unfortunately, rising gold prices usually mean that investors have become pessimistic, and many investors have withdrawn from stocks and started buying defensive assets, and rising gold prices are not necessarily a good omen:
If a major stock market crash occurs... I look forward to it... because the stock market has been at a high for many years...
For those who do not own gold, silver, and Bitcoin, this is not good news.
Robert Kiyosaki suggests that people should take the time to learn, join investment clubs, and look for bargains, and he believes that those who do so will be among the wealthiest and most intelligent investors a few years from now when the next bull market appears:
Smart investors will get rich... whether the market goes up or down.
The relationship between gold price trends and US stock market movements
In fact, there is no direct correlation between the US stock market and gold prices, and from the historical trend charts, the two are almost unrelated, but there is an indirect relationship between them, and the US dollar is also one of the important factors affecting the trend of gold prices.
The US stock market, as a barometer of the US economy, its ups and downs directly reflect the state of the US economy, and in turn, reflect the trend of the US dollar, when the US stock market rises, it indicates that the US economy is in an expansionary period, and when the US stock market falls, it may signal an economic recession, and the US dollar, as the world's major reserve currency, its strength not only affects the US, but also the global economy, and also affects gold.
Overall, there is the following indirect relationship between the US stock market and gold price trends:
- Demand for safe-haven assets: When investors feel that the economic or political environment is unstable, they may seek safe-haven assets such as gold, and the demand for safe-haven assets may lead to a rise in gold prices, while the stock market may fall.
- Inflation expectations: Gold is often seen as an inflation-resistant asset, as its value is not affected by inflation like currency, and if investors expect inflation to rise, they may buy gold, leading to a rise in gold prices, while the stock market may fall, as rising inflation usually impacts corporate profitability.
- Exchange rate of the US dollar: Gold is usually priced in US dollars, so changes in the US dollar exchange rate may affect gold prices, if the US dollar depreciates, gold prices may rise, as investors need to pay more US dollars to buy gold; if the US dollar appreciates, gold prices may fall, in which case the stock market may rise, as US dollar appreciation is usually seen as a positive signal for the US economy.
Looking at historical data, the US stock market and gold can exhibit different trends within the economic cycle, for example, in the early stages of inflation, gold and stocks may rise in tandem, but as inflation enters the later stages, stocks may fall, the US dollar may rise, and gold may fall, and in the late stages of inflation, investors may be concerned about economic slowdown, the stock market may fall, and gold as a safe-haven asset may rise.
In summary, the relationship between gold and the US stock market is not simply a positive or negative correlation, but is influenced by a variety of factors, and investors need to consider the trends of the US dollar, inflation levels, geopolitical risks, and other factors comprehensively when making investment decisions in order to make wiser choices.
