Gold, stocks, bitcoin and bonds: What they tell us about markets right now
It stands to reason that everyone's a genius in a bull market.
And yet, there remains a fine line between genius and madness.
Such is the state of markets right now that a single truism can't fully capture the zeitgeist.
The fact of the matter is that almost anywhere you look, investors are doing better than ever.
Gold is on the move again, stock markets are grinding new all-time highs and Bitcoin has established itself as a six-figure asset.
That's three completely different asset classes with three completely different risk profiles and yet all three are moving in something approaching lockstep.
In fact, since 2016, there's been a surprisingly-strong correlation between the performance of gold and the S&P 500.
Gold and US stocks are both on record runs

This isn't even a Mag 7 or US-specific phenomenon.
The ASX 200, FTSE 100, Nikkei 225 and STOXX 600, amongst others, are all also at record highs.
Even Bitcoin is in on the act, hitting a new ATH of US$123,000 in mid-August before quickly selling off to US$108,000.
But does the fact that Bitcoin has fallen 10% from its own recent ATH suggest there is still a limit to the market's exuberance?
Or does the fact that it so casually broke its ATH recently suggest we're well into exuberant mode?
Either is hard to square with a global economy that's mostly grappling with an ongoing tariff-led trade war, huge global uncertainty, pesky inflation and weak earnings growth.

Given the sums (now worth around US$140 billion) that have flowed into spot Bitcoin ETFs since they launched in January 2024, it's clear there has been legitimate institutional appetite for the cryptocurrency.
But large outflows to Bitcoin ETFs, which no doubt helped trigger the recent fall, suggest its risk-on investors may be waiting to see what happens with the US Fed's September rate decision before putting their foot down on the accelerator again.
This week, a net US$126.7M was taken out of ETFs like Fidelity's Wise Origin Bitcoin Fund (FBTC) and ARK Invest and 21Shares’ ARKB, the first weekly net outflow since June.
Like it is for the stock market, September is also a historically poor month for Bitcoin.
So will this month prove to be a much-needed splash of cold water on growth assets?
Or will the likely Fed rate cut simply pour more fuel on the raging tire fire that is global markets?
Again, this is all happening against a backdrop where US debt is at US$37 trillion and inflation is trending upwards again, yet rates are expected to be cut.
As Ray Dalio told the Financial Times today, "the great excesses that are now projected as a result of the new [US] budget will likely cause a debt-induced heart attack in the relatively near future."
That leaves the Trump administration with an economic Sophie's choice, says Dalio.
Either the US can "allow interest rates to go up and have a debt default crisis, or print money and buy the debt that others won’t buy.”

As is often the case, the bond markets have emerged as the only adults in the room.
30-year US Treasuries edged back towards the symbolic 5% mark.
In the UK, 30-year gilts hit 5.7%, the highest level this century.
German and French bond yields also rose, and Japanese 30-year government bonds hit record highs.
So while the party continues to rage on, there's one attendee attempting to turn the music down and hand out water to the other guests.
Whether they heed the advice is up to them.
It's in their best interests if they do.
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