Are gold and bonds very uncorrelated?

[jason]

Maybe it's just my imagination, but it seems like most of the time when there is bad economic news, gold and Treasuries move up together while the stock market goes down.  And when there is good economic news (like today), stocks go up and gold and Treasuries go down.  So, this makes me wonder, how uncorrelated are gold and bonds?  Are the relationships between gold and stocks and bonds and stocks more uncorrelated than the relationship between gold and bods?  Lately, I've been getting the feeling that the PP is overweight on "bad news" and underweight on "good news".  But I'm guessing the history of the PP over the past 44 years may tell a different story?

[rickb]

Per http://www.efficientfrontier.com/ef/0adhoc/harry.htm, the long term correlation between the annual returns of gold and long term bonds was -0.2 computed from 1964 to 2009.

Daily correlations will be different, but probably in the same sort of ballpark.

There's a discussion of gold and bond prices here: http://www.smarteranalyst.com/2015/11/0 ... ld-prices/

[dragoncar]

I wonder what the correlation has been over the last three years though

[Pet Hog]

TennPaGa, can you provide some further explanation about what your graph shows?  Five-year returns?  Daily data?  What does the current value of 12.5 represent?

[ochotona]

But today! Pfew, they were like 100% correlated...

[dualstow]

I got into the pp in 2010. Bonds have done amazingly well and gold has plummeted. Before that, gold was shining for a decade. Unless I look at certain day-to-day movements, they seem pretty uncorrelated to me.

Even in the day-to-day, when stocks are down and gold & bonds are up, they go up to different degrees.

[MediumTex]

In the 1970s they moved in opposite directions for sure. 

In 2001-2011, there were secular bull markets for both gold and bonds, so they moved up together.  From 1982-2000, however, gold was in a secular bear market, while bonds were enjoying the first 18 years of a beautiful 30+ year secular bull market.  During that period, gold saw some cyclical bull markets, but overall traded in a range.

I guess you could say sometimes these two assets are correlated and sometimes they aren't.