Gold and S&P 500 Close to Document Highs—Which Will Crack First?…

Whereas gold is rising on safe-haven demand, the S&P 500 can be approaching new highs. Nevertheless, BTIG technical strategist Jonathan Krinsky warns that weak seasonal components might set off a short-term pullback. The index has traded inside a good vary for months, and whereas a breakout is feasible, momentum is fading.

Solely 60% of S&P 500 shares are above their 50-day shifting averages, signaling that not all sectors are collaborating within the rally. Moreover, small-cap shares are underperforming, with the Russell 2000 ETF hitting its lowest relative degree since July.

Buyers Are Rising Cautious on Shares

Regardless of the S&P 500’s power, investor sentiment is popping cautious. The newest AAII survey reveals bearish sentiment amongst particular person buyers at its highest degree since late 2023, fueled by considerations over commerce insurance policies, inflation, and fading expectations for rate of interest cuts.

Outflows from U.S. fairness funds reached $11 billion in January, reversing robust inflows from December. Buyers are rotating into defensive sectors like utilities and healthcare whereas trimming publicity to high-growth tech shares.

Market Outlook: A Crossroad for Gold and Shares

Gold stays in a powerful uptrend, with central financial institution demand and macro uncertainty supporting additional good points. In the meantime, the S&P 500 is at an inflection level—if it breaks out, momentum might lengthen increased, however seasonal weak spot and narrowing breadth elevate the chance of a pullback. Merchants ought to watch key technical ranges and sentiment shifts as markets transfer right into a important interval.