Happy Friday, investors. Ever since JPMorgan called out the debasement trade last week, it’s drawn eyeballs to the sharp rally for hard assets like gold. As much as investors have capitalized on the boom, there’s a strange pattern unfolding when you measure it against history.

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Gold is having its best year in decades but it’s happening at the wrong time, according to history.

The metal is often seen as a fear gauge, a hedge against risk and panic that fluctuates based on economic confidence. That’s why it tends to alternate strong and weak years with equities.

This year, though, gold is outpacing the S&P 500 by 35% — one of its widest margins since the financial crisis.

Historically, that kind of move has only happened during moments of stress:

But right now gold is surging while the S&P 500 enters its third year of a bull run.

Gold is beating stocks by about 1.5 standard deviations above its long-run average, making this moment a statistical anomaly, according to DataTrek Research.

“Not only is gold’s recent performance versus the S&P unusual in terms of magnitude, but it is also coming at the ‘wrong’ time in an investment cycle,” said DataTrek co-founders Nicholas Colas and Jessica Rabe.

“There is no analog to this price action over the last two decades.”

Indeed, the S&P 500 is having a better-than-expected year with a 14.7% return, but gold is up almost 50%.

During past cycles, gold only climbed when investors sought out safety.

But somehow today, with risk-assets booming and Big Tech ruling the market, gold and stocks are making record highs simultaneously.

There are a few reasons for this:

It seems, then, that the appetite for gold during the equity bull market is a consequence of investors seeking diversification in their optimism.

Rather than hedging risk like usual, they want as many winners as possible in their portfolio.

That in itself seems to signal an overabundance of confidence in the current outlook.

“[G]old is dramatically outperforming at a time when history says it should be languishing,” Colas and Rabe said.

📈 Nvidia hit another record high after the US government approved exports of the company’s products to the UAE. It’s the first time Nvidia will be allowed to ship its AI chips to the country since President Trump started his new term. (Yahoo Finance)

💵 The US is moving forward with its rescue of Argentina. Treasury Secretary Scott Bessent said America has purchased Argentine pesos, and it has finalized plans for a $20 billion currency swap. (Barron’s)

🟢 It’s about to get easier for companies to go public in a shutdown. Wall Street’s top regulator eased the way for businesses to proceed with IPO offerings during periods when Congress hasn’t approved funding for government operations. (Reuters)

I joined the New York Stock Exchange to unpack why asset prices are going much higher and why investors do not care about a government shutdown.

📰 I’m Phil Rosen, co-founder of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

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