Gold has missed the 2021 momentum rally.

Just about every other asset is powering higher.

The S&P 500 is up almost 7% so far… Junk bonds have rallied to the point where they now yield less than ever before… The price of oil is up more than 20%… Agricultural commodities are up an average of 6% over the past two months… And bitcoin is up more than 50% since Christmas.

It’s been arguably the best, and most broad-based, momentum rally ever – unless you own gold. The price of gold is down 7% since the start of the year.

It’s the weirdest thing… The same “flood of liquidity” that has propped up the values of so many other assets has bypassed the one asset that has a centuries-long history of being a “store of value (an asset that maintains its value, rather than depreciating).

Of course, the youngsters will tell us that bitcoin is the new store of value. That helps explain why the “King of Cryptocurrencies” has outperformed gold by so much this year.

Now though, we’ve reached the point of absurdity. Relative to bitcoin, gold has never been this cheap.

Take a look at this ratio chart comparing the price of gold to the price of bitcoin…

When this chart is moving higher, it means the price of gold is outperforming the price of bitcoin. When the chart is declining, bitcoin is doing better than gold. The chart dropped to a new low yesterday.

The last time there was such a remarkable difference in price action between these two assets was back in late 2018. Over the next year, the price of bitcoin fell more than 50% while the price of gold rallied 25%.

Of course, that doesn’t mean the same thing has to happen this time around. But, with this ratio chart sitting so close to the zero line, it’s hard to imagine the price of gold continuing to languish while the price of other assets continues higher.

At some point, gold will play catch up.

Best regards and good trading,

Jeff Clark
Editor, Market Minute