Important Information:

Dear customers,
Due to high demand and extended delays at our suppliers,
the withdrawal or dispatch of your order could be slightly staggered.
We thank you for your understanding and remain at your disposal for any questions.

14/10/2022

Should we expect a stock market crash?

The U.S. flagship S&P500 index is sitting on a support that calls for caution. October is usually a scary month for investors, as the specter of past crashes looms over the markets. How is gold behaving?

Everyone remembers the crash of October 1929, Black Monday 1987 and, more recently, the crisis of 2008.

Of course, this does not mean that we will have a crash in October 2022, but the chart analysis of the U.S. flagship S&P 500 index suggests to stay cautious.

The S&P 500 broke an important support in September. Indeed, it closed below the lower Bollinger Band (green line). This is a bearish signal that needs to be confirmed!

Source: Tradingview

Indeed, we can see on the chart below that the S&P 500 experienced this situation in 2008. The bearish signal was confirmed and the index fell 40% to the March 2009 low. The index also broke the lower Bollinger Band twice after that, in January 2016 and March 2020, but it bounced right back to close the month above that level.

Source: Tradingview

Promotional offers

Our limited time offers

So what should we expect this time?

If the decline continues, it may fall 10% to the support area around 3200, or even 30% to the 200-month moving average support around 2400.

The index has already lost 25% since its January 2022 high.

With the current geopolitical, monetary and energy context, the downside risk is still present.

And the European Union is very poorly placed on this chessboard. The euro has lost 20% against the US dollar since the beginning of the year. This performance of the greenback has led to very different developments in the price of gold in euros and dollars.

Since the beginning of the year, the yellow metal has recorded a gain of +7% in euros. Volatility is decreasing and the price is consolidating in a sideways drift.

We can therefore say that for an investor in euros, gold has fully played its role as a safe haven!

Source: Tradingview

On the other hand, it posted -8% in US dollars over the same period and began its 7th consecutive month of decline.

Source: Tradingview

Under these conditions, gold remains more than ever an essential diversification and protection asset, especially if your assets are denominated in euros. Basically, by taking a position in gold, you protect yourself against the decline of the euro against the dollar. In other words, gold gives you indirect intrinsic exposure to the dollar.

Although the past does not necessarily tell us what will happen in the future, it does tell us that during the periods of high inflation in the 1970s, the price of gold (in dollars) changed significantly (see chart below). Can history repeat itself? To be continued...

Our latest articles

2025-03-05

March 2025: Market Shift

The S&P 500 is showing signs of exhaustion, while Europe and China are benefiting from renewed investor interest. Uncertainty surrounding Donald Trump’s return to the White...

lire

2025-03-03

Record gold surge in 2025: key factors, risks of the...

Since the beginning of 2025, the gold market has experienced a significant increase, reaching record levels. Several factors have contributed to this bullish trend,...

lire

2025-02-26

The 50 Peso Mexican Gold Coin: A Tribute to the Aztec...

The Mexican 50 Peso is probably the most iconic coin of Mexico. First minted in 1921, this coin commemorates the centenary of independence and embodies Mexico’s cultural and...

lire

2025-01-13

Market outlook 2024 - 2025 according to Bertrand Veraghaenne

Bertrand Veraghaenne: more than 25 years of expertise in the financial markets

lire

News See all

Here you will find important information on economic and financial news as well as information that may have an impact on your investments in gold or foreign currencies

2025-03-05

March 2025: Market Shift

The S&P 500 is showing signs of exhaustion, while Europe and China are benefiting from renewed investor interest. Uncertainty surrounding Donald Trump’s return to the White...

lire

2025-03-03

Record gold surge in 2025: key factors, risks of the...

Since the beginning of 2025, the gold market has experienced a significant increase, reaching record levels. Several factors have contributed to this bullish trend,...

lire

2025-02-26

The 50 Peso Mexican Gold Coin: A Tribute to the Aztec...

The Mexican 50 Peso is probably the most iconic coin of Mexico. First minted in 1921, this coin commemorates the centenary of independence and embodies Mexico’s cultural and...

lire

2025-01-13

Market outlook 2024 - 2025 according to Bertrand Veraghaenne

Bertrand Veraghaenne: more than 25 years of expertise in the financial markets

lire

Should we expect a stock market crash?

The U.S. flagship S&P500 index is sitting on a support that calls for caution. October is usually a scary month for investors, as the specter of past crashes looms over the markets. How is gold behaving?

Promotional offers

Do you have a question?