Divergence With S&P 500 Is Key for Gold to Rally

Jordan Roy-Byrne, Founder and Editor of The Daily Gold, outlines that the key determinant factor for a real bull market in the , and the precious metals mining stocks will be when gold decidedly breaks above the on the ratio chart. There are plenty of historical periods one can point to as evidence that the gold and silver mining stocks outperformed and diverged from the US general equities in prior bear market periods.

He points out that, really, what we are seeing presently in the markets is more akin to what we saw play out in the 1960s, more so than the analogies to the 1970s many pundits have put forward. Jordan addresses the pushback we’ve heard to this thesis, mainly that the precious metals sector can break into a new bull market without the general equities correcting or without the divergence or that in a bear market, the PM equities would just tank along with other markets in a sell everything event.

Jordan outlines why historically and with our data, neither of those counter positions are evidenced.