MW Gold and the S&P 500 are chasing record highs at the same time. Here's why that's so rare.

By Myra P. Saefong

This year's rise for both the metal and the stock index tells a story of 'conflicting narratives'

The S&P 500 and gold are both within striking distance of all-time highs - a rare event that leaves investors wondering what exactly is going on.

After all, stocks at all-time highs indicate that investors are optimistic about the future and happy to pile into risky assets. Gold, meanwhile, is often viewed as a safe haven - a port in the storm during periods of uncertainty.

"It's like watching someone eat salad and dessert at the same time," said Adam Koos, president and senior financial adviser at Libertas Wealth Management Group. "Investors are trying to be 'healthy' but still hedging against what might come later."

'It's like watching someone eat salad and dessert at the same time. Investors are trying to be "healthy" but still bill still hedging against what might come later.'Adam Koos, Libertas Wealth Management

It is possible for both the S&P 500 and gold to hit, and hold, record highs at the same time, but "it's not exactly the norm," he said. When it does happen, it's usually "under a specific set of conditions that reflect a combination of optimism and anxiety in the markets."

This year's rise for both tells a story of "conflicting narratives," Koos said. "The stock market is pricing in a soft landing with [artificial-intelligence] fueled earnings growth, while gold is pricing in longer-term structural concerns" such as runaway deficits, a weakening dollar or even central-bank demand from countries hedging U.S. exposure.

Traditionally, the S&P 500 SPX and gold (GC00) are "somewhat inversely correlated," he said. When they rise together, it often "points to a deeper undercurrent," such as fear around inflation, a weakening dollar or expectations that the Federal Reserve might start easing interest rates.

Both gold and the S&P 500 have been moving higher so far this year, though the metal has far outpaced the rise for the index.

As of Monday, gold futures were up nearly 27% in the year to date and sitting just 2.1% below the record high set on April 21, according to Dow Jones Market Data. The S&P 500 is up only 2.1% this year but has roared back from the steep selloff that followed President Donald Trump's unveiling of sweeping tariff measures on April 2. The S&P 500 as of Friday was just about 2.3% below its record finish, scored on Feb. 19.

Read: The S&P 500 is back at a big milestone. Here's what one strategist needs to see to be even more optimistic.

"The rare positive correlation between gold and the index, which historically tend not to peak together, may have been fueled by dovish Fed expectations and fiscal as well as structural concerns," said Dina Ting, head of global index portfolio management at Franklin Templeton.

The S&P 500 index and gold futures had reached respective record highs at the same time earlier this year, on Feb. 18, with the index marking a record close at the time of 6,129.58 and gold settling at $2,949.

Tandem move

Equities tend to respond to growth-related factors like earnings and interest rates, while gold prices tend to move on more fear-related factors like inflation expectations or debt levels, said Keith Weiner, chief executive officer of Monetary Metals.

Right now, we seem to be in a period where both sets of forces are "elevated," he said. Optimism is driving equity markets higher, while underlying fears are supporting record demand for gold" and investors are "positioning for both potential outcomes by continuing to buy stocks for growth and gold for stability."

To see the precious metal and the index move in tandem is a break from the norm, but it's not surprising to see, said Harley Kaplan, an independent financial advisor in Plymouth, Mass.

"Investments can be emotion driven and presently, there is a lot of risk in the world," he said. Gold has always provided security against turmoil, while investors in equities invest for tomorrow - "showing confidence in the future."

Ratio 'elevated but not extreme'

Meanwhile, the ratio between gold and S&P 500, which represents how many ounces of the metal are required to buy the index, appears to have rebounded since narrowing and is "elevated but not extreme," said Franklin Templeton's Ting.

"That suggests confidence in equities, but not an outright dismissal of gold," she told MarketWatch. "The significance here is it's signaling a reversion to more traditional dynamics."

At roughly 1.76, the ratio currently favors gold, Koos said. It had fallen to around 1.5 back in April, according to a chart provided by Libertas Wealth Management.

When the ratio falls, gold is the relative outperformer, which likely means that investors are "shifting toward safety or bracing for volatility," he said. When the ratio is moving up, the bulls - and momentum and strength - are in the hands of the S&P 500, he said.

That said, although it's rare, the index and gold could reach record highs simultaneously again, said Koos.

For that to be sustainable, however, there would likely need to be a combination of falling real interest rates or dovish Fed policy, ongoing demand for hard assets - such as central banks buying gold - continued belief in long-term growth that would support equities and "enough macro uncertainty to keep fear trades alive," he said.

"It's a fragile dance," Koos said, likening such a situation to watching "someone balancing two spinning plates." It's possible for a while, he said, but it "takes constant motion and the right conditions to keep both from falling."

-Myra P. Saefong

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June 10, 2025 07:00 ET (11:00 GMT)

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