Investor Video: S&P500 history books suggest the index could rally over the year, Gold ETF flows surge

Investor Video: S&P500 history books suggest the index could rally over the year, Gold ETF flows surge

Jessica Amir
Market Strategist

Summary:  What investors need to perhaps consider now the S&P500 hit a new five-month high and marked its first ‘golden cross’ in 2.5 years. We cover what it could potentially mean for equities and investors over the next 6-12 months. Plus, why the longer term operating outlook for Gold companies is getting brighter; with some ETF flows surging 100-400% so far this year.

What's happening in markets now and what investors need to consider  

 

S&P500 continues its move up, to a new five-month high marking its first ‘golden cross’ in 2.5 years

The S&P500 has now gained 19% since its October low. And overnight a key technical milestone was achieved for the first time in 2.5 years; the S&P500’s 50-day moving average crossed above the 200-day moving average, forming a “golden cross”. For investors, this means stocks could potentially continue to rally over the next six to12 months if history repeats itself. That said, this event doesn’t guarantee gains. A ‘golden cross’ event has occurred 52 times since 1930. In that time, stocks were trading higher one year later, in 71% of the instances. So while this is helpful to know  - suggesting stocks could have more room to run, we need more indicators for confirmation, such as for S&P500 earnings. They need to continue to beat expectations and also rise. And also we need to see more signs that US inflation is in ‘disinflationary phase’, as the Fed suggests.

The long term operating outlook for Gold companies is getting brighter; and ETF flows surge

Gold companies and ETFs are getting more popular among investors. Not only as the gold price has gained 17% from its cycle low, but importantly, gold companies outlooks could also improve if; gold continues to rally, hits $2000, and banks eventually ease interest rates. Throughout historically gold has generally rallied strongly when the Fed pauses and cuts interest rates. The market is perhaps pre-empting this. Another factor contributing to the ‘gold rush’ is that central banks are increasing their gold holdings, as we’ve been alluding. Positions in gold ETFs have grown considerably this year, with the largest gold ETF fund globally, VanEck Gold Miners ETF (GLD), seeing inflows rise 400%, suggesting retail are increasing their positions. Other popular gold ETFs so far this year include iShares Gold Producer UCITS ETF (IAUP) and iShares MSCI Global Metals and Mining Producers ETF (PICK) with inflows into those ETFs rising over 100% this year.

For our global team's take on markets; head to Saxo's inspiration page.

And follow our daily global Podcast here.

 

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.