The Gold-Stock Correlation Flip: Invesco Strategist Explains Market’s New Dynamic

Invesco’s Chief Global Market Strategist Kristina Hooper explains that gold’s relationship with stocks has fundamentally changed.

Historically, gold and stocks had a low correlation, moving in opposite directions, but now they’re rising in tandem.

Hooper attributes this shift to investors using gold as a hedge against geopolitical and fiscal deficit risks while maintaining equity exposure.

Additional factors driving gold prices include “price insensitive” central bank buying, reactions to sanctions, and gold’s emerging role as a “quasi alternative currency.”

Notably, Hooper doesn’t believe the gold surge signals inflation concerns, as gold hasn’t consistently performed well as an inflation hedge.