Bloomberg: Low U.S. Stock Volatility May Signal Risk; Gold’s Advantage Over U.S. Bonds Near Record High

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Bloomberg strategist Mike McGlone warns that low U.S. stock volatility, as measured by key volatility indicators, may signal hidden risk ahead of a historically volatile season. The risk-to-reward ratio for equities appears unbalanced compared to gold. Meanwhile, the GLD-to-TLT ratio is near a record high, indicating gold’s growing outperformance relative to long-term U.S. bonds.

ChainThink reports that on September 3, Bloomberg commodities strategist Mike McGlone stated that U.S. stock market volatility is currently at its lowest level relative to gold since 2007, and the market is entering the traditional volatile season, which could impact the performance of gold, stocks, and bonds in the second half of the year.

McGlone noted that the ratio of the SPDR Gold Shares ETF (GLD) to the iShares 20+ Year U.S. Treasury Bond ETF (TLT) has approached historical highs, indicating that gold is performing exceptionally strongly relative to long-term U.S. Treasuries.

Historically low stock market volatility occurred just before the 2008 financial crisis; it remains to be seen whether the current situation is repeating itself.

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