Investment and financial bestseller “Rich Dad Poor Dad” author Robert Kiyosaki recently warned that this year’s record highs in gold are not a good sign for the stock market, and a stock market crash may be imminent. So, is there a direct relationship between the trends of gold and US stocks?
Amid geopolitical tensions, inflation concerns, and uncertainty over the US presidential election results, safe-haven sentiment has been on the rise. This, along with strong demand from global central banks, has propelled gold prices to historic highs this year, breaking the $2600 mark with nearly a 30% increase year-to-date.
Robert Kiyosaki, author of “Rich Dad Poor Dad”, recently stated that while gold prices have reached record highs, those who have invested in gold have done well since 2000, including himself. Unfortunately, Kiyosaki pointed out that a rise in gold prices usually indicates a bearish sentiment among investors, with many withdrawing from stocks and turning to defensive assets. Therefore, a rise in gold prices is not necessarily a good sign.
He advised people to spend time learning, join investment clubs, and watch for cheap goods, believing that those who do so will become the richest and smartest investors in the next few years when another bull market arrives.
In fact, there is no direct relationship between the trends in the US stock market and gold prices, as seen in historical trend charts. However, there is an indirect relationship between the two, with the US dollar being one of the important factors influencing gold prices.
Overall, the relationship between the trends of US stocks and gold is not simply positive or negative, but is influenced by multiple factors. When making investment decisions, investors need to consider factors such as the trend of the US dollar, inflation levels, geopolitical risks, and more in order to make wiser choices.