Macro

Gold and Gold Stocks Shine, Outperform S&P 500 and Nasdaq

Gold shines with GLD up 15%, outperforming S&P 500 and Nasdaq, as investor sentiment shifts towards safe-haven assets.

By Bill Bullington

5/16, 13:48 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
VanEck Gold Miners ETF
SPDR Gold Trust
Royal Gold, Inc.
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Key Takeaway

  • Gold and gold stocks outperform S&P 500 and Nasdaq in 2024, with SPDR Gold Shares (GLD) up 15%.
  • VanEck Vectors Gold Miners ETF (GDX) sees a potential 40% gain from February to spring highs, indicating strong momentum.
  • Royal Gold (RGLD) breaks resistance at $123, signaling further upside to all-time highs around $145.

Gold Outshines Equities

In a surprising twist for 2024, gold has outperformed major equity averages, with SPDR Gold Shares (GLD) witnessing a 15% increase, surpassing the S&P 500's 12% gain and the Nasdaq 100's 11% rise. This resurgence in gold's value, particularly from March to early April, underscores a significant shift in investor sentiment towards this traditional safe-haven asset. Despite a period of dislocation where gold miners diverged from the physical commodity's performance, the VanEck Vectors Gold Miners ETF (GDX) has realigned, showcasing a robust 40% gain from its February low, outpacing the S&P 500's 8% rally in the same timeframe.

Breakout Potential in Gold Stocks

The potential for gold stocks to break above resistance levels is underscored by the performance of individual stocks like Royal Gold (RGLD), which has begun to show early signs of breakout. RGLD's ascent above the $123 resistance range signals a change in market dynamics, indicating a strong influx of buying power. This breakout suggests a possible retest of all-time highs around $145, highlighting the sector's strength and the growing investor interest in gold as a diversifying asset amidst a backdrop of growth-dominated equity benchmarks.

Diversified Returns from Gold

David Keller, CMT, emphasizes the compelling nature of gold's differentiated return profile, especially as it provides a contrast to the growth stocks that dominate equity benchmarks. The strength observed in both physical gold and gold miners positions this sector as an attractive opportunity for investors seeking diversification. Keller's analysis, coupled with his personal investment in GLD, reflects a broader market sentiment that recognizes the potential of gold to enhance portfolio performance, particularly as we approach the summer months.

Street Views

  • David Keller, CMT (Bullish on gold and gold stocks):

    "Given the strength in the charts of physical gold and gold miners, this group may serve as a compelling opportunity going into the summer months."