Since 2000 Gold shines al lot more than the S&P 500

Current market commentary

The “pain trade” on the stock markets has recently continued. The S&P 500 has recovered by 20% from its lows in April, forcing more and more underinvested investors to enter the market. The decline in realized volatility has meant that systematic strategies in particular have recently had to build up equity exposure again - and will probably continue to do so in the coming weeks if there is no new external shock. Accordingly, it is highly likely that the equity markets will continue to creep upwards, supported by underinvested discretionary investors who use every correction as a buying opportunity. The market is only likely to fall more sharply if either interest rates rise quickly and sharply or the US labor market weakens significantly and the risk of recession increases. If this does not happen, the “pain” is likely to continue. However, it should not be forgotten that gold has been by far the best asset class since the beginning of the year. It has also risen recently due to increasing concerns about rising US government debt. It would therefore have been even more painful not to be invested in gold or to be under-invested.

Short-term outlook

With the end of the reporting season for the first quarter, the market is likely to turn its attention back to economic developments and (monetary) policy. The focus will be on the G7 summit in Canada from 15 to 17 June and the interest rate decisions by the US Fed and the Bank of England on 18 and 19 June. On Wednesday, the market will focus on US consumer price inflation (May) and on Thursday on US producer price inflation (May). This will be followed on Friday by industrial production data for the eurozone (Apr. ) and preliminary consumer confidence from the University of Michigan (Jun.). The following week will see the publication of US industrial production data (May), US retail sales (May) and European consumer price indices (May).