Gold hits new high US stocks plunge overnight crash

Shortly after 9 p.m. Et, global financial markets experienced a sudden storm. Gold and silver prices suddenly jumped, and U.S. stocks also showed a strong upward trend. Spot gold opened at $2,421.76 per ounce and began a steady climb, stabilizing in the $2,443 area before selling off sharply after 8:30 a.m. But just before 9 a.m., gold rebounded sharply at the $2,430 level and then began to rally sharply, rising to a new all-time high of $2,465.34 shortly before noon ET.

As early as July 11 this year, the US stock market experienced a violent shock, and the market value evaporated significantly. This is largely due to changes in Fed policy expectations and market fears of a recession. The impact of the surge in gold on the US stock market is a complex and diversified topic, one is market sentiment and hedge demand, gold is usually regarded as a safe haven asset, and its price surge often reflects the continued warming of the market risk aversion. When investors are worried about the outlook for the global economy or a particular market, they may move money from riskier equity assets to relatively safe assets to avoid various potential risks. The surge in gold prices could signal a lack of confidence in the future direction of the U.S. stock market. This decline in confidence could stem from a variety of factors, such as slowing economic growth, lower corporate earnings expectations, and increased policy uncertainty.

The second is the change of capital flow, the soaring price of gold may attract a large number of funds from the US stock market to invest in gold. This kind of capital flow will directly affect the liquidity and price trend of the US stock market, which may lead to the decline of the US stock market. Uncertainty about the global economic situation and the risk of a possible recession in the United States added to the market's concerns. Gold is denominated in dollars, and a sharp rise in its price is often accompanied by a fall in the dollar. A weaker dollar makes U.S. assets, including stocks, less attractive because foreign investors have to pay more in their own currency to invest in U.S. assets. That could further exacerbate outflows from U.S. stocks.

Third, the surge in gold prices may reflect investors' pessimistic expectations about the future growth of the global economy or the U.S. economy. Such expectations may lead investors to lower their earnings expectations for the U.S. stock market, which in turn affects the valuation and price of U.S. stocks. The surge in gold prices could also raise expectations of policy changes by central banks such as the Federal Reserve. For example, if the market believes that the Federal Reserve will adopt easy monetary policies such as interest rate cuts because of slowing economic growth, this could change investors' perceptions and expectations of the U.S. stock market. However, it is important to note that the expectation of policy adjustment does not necessarily translate into the actual movement of the US stock market immediately, because there are many other factors that the market needs to consider.

To sum up, the impact of the gold boom on the US stock market is multi-faceted and complex. It could have a negative impact on U.S. stocks through multiple channels. However, it is important to emphasize that this effect is not absolute and one-way. Therefore, investors need to consider a variety of factors when investing, and pay close attention to market dynamics and policy changes. At the same time, investors should also be cautious and formulate appropriate investment strategies according to their own risk tolerance and investment objectives.