Bloomberg Intelligence senior commodity strategist Mike McGlone has warned that gold’s persistent outperformance over equities and cryptocurrencies is flashing a warning sign for risk assets.
He noted that for nearly eight years, the S&P 500 has failed to gain ground against gold, reversing a long-term trend where stocks consistently outpaced the metal.
In an X post on August 23, McGlone said this divergence reflects fading confidence in human ingenuity and corporate earnings to deliver superior returns compared to hard assets.
The concern extends to Bitcoin, often dubbed “digital gold,” which has also stalled against the metal. Even with the VIX at fresh lows, the cryptocurrency has struggled to sustain momentum.
McGlone had previously argued that a rebound in volatility could push the VIX back to its 2025 average near 20, with Bitcoin gravitating toward its $100,000 mean. Still, he noted the asset remains weighed down by skepticism.
Troubling dynamic
His analysis highlighted a troubling dynamic where the S&P 500 measured in ounces of gold has been rolling over, tracking closely with U.S. 2-year Treasury yields. Historically, such declines have coincided with periods of stress for risk assets. The ratio now sits near multi-decade lows, underscoring gold’s steady outperformance.
Meanwhile, pressures on the Federal Reserve complicate the outlook. With inflation above target 2% and long-term Treasury yields rising, the central bank faces growing calls to cut rates. McGlone stressed that in either case, gold stands to be one of the biggest beneficiaries.
By contrast, cryptocurrencies continue to display frothy, bubble-like behavior, leaving Bitcoin’s leadership role vulnerable if confidence weakens further.
Indeed, McGlone’s outlook comes at a time when all three asset classes have enjoyed positive momentum in 2025, notching new highs. Notably, while cryptocurrencies and stocks have faced volatility, gold has remained steady.
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