Gold vs. the S&P 500: With Inflation at a 3-Year High, Which Does History Say Wins?
Key takeaways
- According to the Bureau of Labor Statistics, prices rose 4.2% over the previous 12 months, accelerating from its 3.8% increase in April.
- However, the S&P 500 is still trading near its all-time highs and looks historically expensive at 32 times earnings.
- In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
According to the Bureau of Labor Statistics, prices rose 4.2% over the previous 12 months, accelerating from its 3.8% increase in April. That pressure could force the Federal Reserve to raise its benchmark interest rates to throttle economic growth and tame inflation.
However, the S&P 500 is still trading near its all-time highs and looks historically expensive at 32 times earnings. Meanwhile, gold -- the conventional hedge against inflation -- has retreated about 24% from its record high of $5,589 per troy ounce in January.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »