Are there signs of a major decline in the stock market in gold prices?
It is said that gold and stock markets run in the opposite direction of each other. Rising prices of gold acts as a risk indicator for the stock market. On the other hand, whenever there was a rise in the stock market, the prices of gold were seen to fall. Now some experts believe that now this corruption has not been a relative indicator. Now it is not necessarily not necessarily gold prices if the stock market rises. Now both are seen to be seen together and declining together. Such fluctuations have been seen earlier.
By the way, the Indian stock market has seen a decline in the last one year. Whereas gold prices have seen a jump of more than 50 percent. This is the reason that some experts have started comparing this era with Nixon era. Trump’s tariff is being called Nixon Shock. Also, it is believed that the way gold prices have seen a rise. Because of this, there can be great destruction in the stock market. Let’s try to understand this…
55 year old signals
Some people are seeing 55 -year -old signs in the current era. When Nixon Shock was seen in America. Due to which there was destruction in the stock market. After the 1971 ‘Nixon Shock’-which effectively eliminated the Bretton-Woods system-gold prices caught tremendous speeds, which were stable at $ 35 an ounce from 1934. As a result, gold prices continued to skyrocket for the next two decades. The reasons like high inflation and geo political tension were also included behind which. At that time, investors made profits from the stock market and started buying gold. The current era is also understood to be something similar. If we talk about India, then the prices of gold have seen a gain of 50 percent in a year. While the Sensex and Nifty saw a decline. At the same time, gold has increased by more than 40 percent in foreign markets. For this reason, it is being speculated that there may be a big decline in the stock market in the coming days.
Now broken such a relationship
ICICI Securities said that such a relationship between gold and equity is now broken. Gold prices saw randomly negative and positive corruption. Continuous increase in gold prices is just a coincidence. Not inspired by an accident or casualt. ICICI Securities believes that this corruption is no longer a reliable indicator. Brokerage said that the rising prices of gold today are not necessarily indicating a decline in shares, nor the rise in shares means weakness in gold. ICICI Securities said that until the tariff issue is resolved and the demand from the central banks does not decrease, till then the relationship between the stock market and the gold does not matter.
When gold and market boom together
By the way, the stock market and gold prices have been seen together first. Following the global financial crisis of 2008-09, the rules were changed by central banks. Due to which there was a tremendous jump in the stock market. At the same time, there was a steady rise in the prices of gold. During that time, a positive corruption was seen in both. A similar overlap was seen in the 1980s, when both gold and equity reached a record height simultaneously.