Gold has sharply outperformed equities in 2024 as investors continue to seek safety amid mounting economic and geopolitical uncertainty, according to analysis from The Kobeissi Letter, a prominent capital markets newsletter.
While gold had lagged the S&P 500 by nearly 10% since 2020, the tide has now turned. The newsletter notes that GLD, the SPDR Gold Trust ETF, is up 109% over the same period, compared to 74% for the S&P 500.
Analysts attribute the shift not to weakness in equities, but to an overarching driver: uncertainty.
"Why are gold prices surging even as the market recovers? Uncertainty remains the answer," the Kobeissi Letter wrote on X.
Why are gold prices surging even as the market recovers? Uncertainty remains the answer. ведет в настоящее время: The Kobeissi Letter
The recent surge in gold prices coincides with record-setting capital flows into gold funds. Three weeks ago, gold ETFs saw net inflows of $8 billion, the largest ever recorded, according to the Kobeissi Letter. The four-week moving average has now climbed to roughly $4 billion, another all-time high.
Analysts described the current cycle as "likely the strongest gold market of all time," citing both investor sentiment and institutional demand.
The Kobeissi Letter also highlights aggressive central bank buying, which continues at historically elevated levels. Citing macro strategist Otavio Costa, the report says gold now makes up approximately 18% of global foreign exchange reserves, the highest proportion in 26 years.
At the same time, foreign ownership of U.S. Treasuries has dropped to just 23% of total U.S. government debt, marking the lowest share in over two decades. This shift points to waning confidence in traditional dollar-denominated assets.
Further boosting gold's appeal is the weakening U.S. Dollar Index (DXY), which recently touched a 52-week low. The index, which tracks the dollar against a basket of foreign currencies, has declined nearly 10% since the start of the trade war cycle.
A weaker dollar typically makes gold cheaper for foreign investors, further enhancing demand. Kobeissi analysts even suggest that gold is now acting as a "leading indicator for tariffs", reflecting broader investor sentiment about macroeconomic risks.
