What Is Gold Telling Us?

Why has gold moved up in price faster than the hot stock market? Generally gold moves down when stocks move up and vice versa. Not this year. Gold goes up when the dollar falls, when inflation rises and when fear is high. 

The dollar is down for the year; why is that? When the economic numbers and the stock market are up and getting better? That too is odd. Regardless, with the dollar weak that could help explain why gold is up. Inflation this week spiked a bit in a January CPI report and that too moves gold up. However, there is no fear in stocks and not too much worldwide at this point so that is not the cause. 

So there is some justification for the gold move but why is it up more than stocks? Maybe the gold bugs know something the rest of us don’t, or maybe they just think they do.They might be a bit worried about the promises coming out of the White House and the actual effect those possible changes will have if and when they are implemented. On one hand it could cause more inflation, good for gold, or a trade war would cause panic in some areas of the world, good for gold, or other economies might just start to grow slowing the dollar down, also good for gold. 

Finally maybe the gold buyers think the stock market is overvalued and will correct soon. It is overvalued but guessing when the correction might come is a waste of time.