Benjamin Cowen explains why gold breaking out against the stock market is a major regime shift, and why this environment continues to be difficult for stocks and crypto despite occasional rallies.

Key Points

Key Highlights:

  • Gold is making new highs, but the more important move is gold outperforming stocks

  • The S&P 500 is breaking down against gold, a pattern seen before major market shifts

  • Cowen focuses on relative performance, not just price in USD

  • Similar breakout structures appeared in Bitcoin dominance, commodities, and stablecoin dominance before long trends

  • Once these relative breakouts happen, pullbacks tend to be temporary, not trend-ending

  • Stocks tend to bleed against gold regardless of gold going up or down

  • This mirrors crypto, where altcoins bled against Bitcoin in both bull and bear phases

  • Selling strong assets to buy weak ones too early is a common mistake

  • Metals are currently the leading asset class, not stocks or crypto

  • Crypto is unlikely to bottom until gold first tops, corrects, and finds a low

  • Based on past midterm years, Cowen expects gold to peak in the first half of the year and bottom in late Q3 or early Q4

Takeaway

Cowen’s view is straightforward: gold has entered a new leadership phase. Until that trend ends, stocks and crypto are likely to continue underperforming on a relative basis. Trying to front-run rotations has been costly, and history favors staying with what’s working rather than guessing when it will stop.

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