"Gold tends to shine in times of rising geopolitical fears, but not this time around, with the shiny yellow metal taking a huge hit, giving back much of the gains from the past year in the middle of the Iran war."
"Gold's beta is in the ballpark of 0.70 nowadays, which is quite high, especially when you consider it's been hovering between 0.15 and 0.50 for much of the past three years."
"Indeed, you have to go back more than five years to see a climate where gold was this correlated to the S&P 500."
Gold has historically performed well during geopolitical crises, but recent trends show it has underperformed despite rising tensions, particularly during the Iran war. After a strong 2025, gold's momentum has faltered, leading to speculation about its future as a hedge against chaos. The correlation between gold and the stock market has increased, indicating it may now behave more like a risk asset. Despite these challenges, gold remains a viable option for investors, especially in the context of the ongoing 'debasement' trade.
Read at 24/7 Wall St.
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