Bloomberg: Low volatility in US equities may signal risks, while gold's advantage over US Treasuries is near a historic high.

Bloomberg commodities strategist Mike McGlone wrote in a note that U.S. stock market volatility relative to gold is at its lowest level since 2007, and as markets enter their traditional volatile season, this situation could impact the performance of gold, stocks, and bonds in the second half of this year. McGlone noted that the ratio of the SPDR Gold ETF (GLD) to the iShares 20+ Year U.S. Treasury Bond ETF (TLT), which he tracks, is near an all-time high, indicating gold is performing extremely strongly relative to long-term U.S. Treasuries. He said that historically, extremely low stock market volatility occurred ahead of the 2008 financial crisis, and whether the current market will repeat a similar scenario remains to be seen. After gold surged to around $5,600 per ounce in the first quarter of this year, it may face pullback pressure similar to that seen after crude oil prices peaked in 2008. McGlone pointed out that commodity markets have a reversal effect after "rising too fast". After crude oil hit its peak in 2008, it weakened continuously relative to its 60-month moving average, with successive lower highs and lower lows. At that time, crude oil's premium relative to its long-term moving average hit its highest level since the 1973-1974 oil crisis. In February this year, gold once reached a premium of about 2.2 times its 60-month moving average, a level last seen in 1980. However, the difference is that this round of gold's rise has set an unprecedented record amid a non-high-inflation environment, so its subsequent trend remains to be watched.