Gold is doing what it is supposed to do!
Equity markets are tumbling, “NASDAQ 100 Rout Erases $1.5 Trillion in Market Value in 3 Days” reads one Bloomberg headline.
The big names such as Apple lost over US$225 billion, Microsoft almost US$200 billion, Amazon and Tesla each lost US$175 billion market value over the three trading days from May 4 to May 9.
Bonds are also declining in value as yields are rising. The market selloff has been the most extreme in the tech sector, but most major indices are lower year-to-date.
The chart below shows the gold price along with five different equity indices. In order to compare performance since the beginning of the year, we set January 4, 2022, to 100.
Equity markets have tumbled sharply since the beginning of the year