Gold outperforms S&P 500 YTD as economic uncertainty looms

Historical patterns hold, as gold outshines stocks during economic turbulence.

James Van Straten / @jvs_btc / Apr. 5, 2024 at 12:13 pm UTC

Quick Take

Notably, in 2024 thus far, gold has outpaced the broader equity market, rising approximately 11% compared to the S&P 500’s 9% gain.

Gold vs SPX: (Source: TradingView)

Over the past 70-80 years, the relative performance of the S&P 500 and gold has fluctuated, with each dominating at different times, underscoring gold’s historical role as a hedge against economic uncertainty.

Historically, gold has demonstrated a tendency to outperform the S&P 500 during periods of uncertainty, notably observed from 1972-1996, which encompassed five recessions and in the aftermath of the 2008 financial crisis.

Gold vs SPX: 1950-2023: (Source: TradingView)

Several macroeconomic factors likely contribute to gold’s current robust performance. According to FRED data, the United States sizable deficits, total public debt as a percent of GDP exceeding 120% in Q4 2023, and escalating commodity prices suggest a potential for an inflationary rebound and ongoing global conflicts.