A Dow buy signal says Warren Buffett’s gold stake came too late for the precious metal – by George Manessis (CNBC.com – August 18, 2020)

https://www.cnbc.com/

Gold had its best day since April on Monday, but market history says it may be time to bet against the precious metal.

A surprising development helped to propel gold higher: long-time gold naysayer Warren Buffett’s Berkshire Hathaway revealed a big stake in gold miner Barrick Gold. While Buffett has dismissed gold as a shiny, useless “cube” in the past, Berkshire’s bet could signal that even it sees value in gold as a market and inflation hedge.

But don’t read too much into the 2.5% one-day gain. Stocks — in particular the Dow Jones Industrial Average — may prove to be a better bet in the short-term, according to information from hedge fund trading tool Kensho.

Granted, gold is having a great year, up over 31% and on pace for its best annual rally in a decade.

But when gold spiked on Monday it was the highest level for the gold trade since August 11, and that’s revealing in a potentially negative way. The precious metal took a sizable hit last week, declining by roughly 5%.

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