Gold and the stock market don’t usually share the spotlight. When they do, it might mean the usual signals of fear and confidence are colliding. Or it might mean something deeper is brewing.
Gold has risen 44% this year. The S&P 500 Index is up 14%. On Monday, both closed at new highs. The two asset classes hitting all-time highs on the same day has now happened 6 times in 2025. It happened 10 times in 2024. But, from 1970 through 2023, it occurred only twice, both in 1972. That was the year after President Nixon ended the dollar’s convertibility into gold, which allowed the metal to trade freely.
The pattern is, clearly, out of step with history. And for good reason.
Gold is considered a safe haven and usually performs best when the economic outlook is uncertain. That’s been a rarity for much of the last half century. Jim Stack, founder and CEO of Stack Financial Management in Whitefish, Montana, points out that there have only been four periods in the last 54 years when gold has hit an all-time high. Stocks typically climb when conditions look favorable (or, in the modern era of central banking, when conditions look bad enough that investors expect a wave of money printing). One reading for the current situation is that investors are unsure and positioning for both growth and risk at the same time. Another explanation, which may not be entirely separate from the first, is the sharp decline in the dollar.
The U.S. Dollar Index, which tracks the currency against major trading partners, is down 10% this year. That would be its worst year since a 15% drop in 2003. A weaker dollar supports gold, which is priced in dollars. It also boosts U.S. equities by making them cheaper for foreign buyers.
Marko Papic, chief strategist at Montreal-based BCA Research, says the decline in the dollar is the main driver.
“The answer is: USD is selling off,” is the reason he gives for gold and equities both shining at the same time. Papic argues the dollar had been supported for years by expectations of permanent U.S. economic outperformance. Much of that strength, he says, came from the fiscal response to the pandemic. Trillions in spending ended up on household balance sheets. But that money has now run out.
At the same time, tariffs and trade tensions have forced other regions to stimulate their own economies rather than rely on U.S. demand. Papic calls the end of U.S. fiscal dominance a turning point. “Currencies go up and down,” he says. “The bigger mistake is thinking U.S. assets will always outperform. It’s impossible.”
Peter Corey, co-founder and chief market strategist at Pave Finance in New York, sees the same dynamic. He notes that inflation has been falling since 2022, which has supported corporate profits and lifted stocks. At the same time, the weaker dollar has made gold more attractive. “Two salient things are occurring simultaneously,” Corey says. “As inflation is being contained, this is bullish for stocks. Meanwhile, the dollar is falling in value, pushing investors toward gold.”
Corey draws a parallel to the early 1970s. Inflation fell from 1970 through 1972, helping stocks climb. In 1973, inflation reaccelerated, the Federal Reserve doubled interest rates within a year, and the S&P 500 lost half its value. He warns that if inflation begins to rise again, today’s markets could face a similar outcome. “Investors will be even more sensitive to the Fed now than 50 years ago,” he says.
The simultaneous rise of gold and stocks is rare. It reflects both a weakening dollar and an unclear economic outlook. The relationship can continue, but history suggests it won’t last forever. At some point, one asset will break from the other. Which one holds up will depend on whether the economy moves toward sustained growth or renewed strain.
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