24K99 News On Tuesday (April 23), gold took a break at $2,332 after falling back from a high earlier this week. Analyst Jordan Roy-Byrne said that due to what has happened in the past 15 years, everyone believes that when the stock market crashes, precious metals will fall. However, he emphasized that the precious metals market has broken through history.
(Source: GoldSeek)
He mentioned that the precious metals sector did not perform well in the past three stock market bears. These include the initial tightening of the Federal Reserve's policy in 2022, the COVID-19 crisis in the spring of 2020, and the core period of the global financial crisis in the fall of 2008.
Investors are convinced that precious metals will fall during the next recession. History has confirmed their views.
However, we are talking about recent history.
Investors are succumbing to recent biases, a cognitive bias that favors recent events over historical events, and places more emphasis on recent events.
As a result, due to what has happened in the past 15 years, everyone believes that when the stock market crashes, precious metals will fall.
Investors overlooked gold, gold stocks, and to a lesser extent the negative divergence between gold and the stock market between 2000 and 2002.
Furthermore, investors overlooked stagflation in the 1970s, when negative correlations between precious metals and stocks persisted.
The negative correlation was particularly evident from 1973 to 1977.
From 1973 to 1974, the stock market lost half of its value. Precious metals exploded higher.
From the end of 1972 to mid to late 1974, gold rose by 240%, silver soared by 315%, and the Barron Gold Index soared by nearly 400%.
(Source: GoldSeek)
Precious metals fell sharply from 1975 to 1976, gold fell 45%, and gold stocks fell 60%. This occurred after inflationary pressure subsided and the economy recovered.
Gold has broken through, and so is silver, just as storm clouds (stagflation) are gathering on the horizon.
Jordan emphasized, “The fear of Boogeyman in 2008 is strong, but if you think precious metals will be hit, then you're misreading the situation.”
“A repeat of 1973-1974 is much more likely.”
“It is only two months since the biggest breakthrough in the price of gold in 50 years, which will push silver higher.”
“The excellent performance of primary gold and silver stocks has only just begun.”