Gold vs S&P 500 Stock Index (XAUSnP)

XAUSnP, an instrument with a potential presence of negative correlation of a commodity with stocks, can provide a good advantage for trading as prices can move in opposite directions showing strong fluctuations in response to a driving force influencing both assets simultaneously. An active trading strategy may be appropriate in periods of neutral trend which may be also extensive and in periods of severe fluctuations.

The instrument’s performance is presented on the chart below, which illustrates a severe decline in November 2011 following the “double top” pattern formation. Exactly in the same period the traditional instrument XAUUSD experienced another correction move. The analysis of XAUSnP could provide a confirmation signal about the general decline on the market of gold.

Gold vs index S&P 500