Today, just like United States treasury bonds in the iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT) has rallied as the United States dollar has sold off, a similar rotation might be about to come in between the price of gold and oil, where the basic materials sector (mining stocks specifically), and the energy sector will see the bulk of the price action in the coming months.
By tracking the price action between the two areas of the economy, like the SPDR Metals & Mining ETF (NYSEARCA: XME) alongside the Energy Select Sector SPDR Fund (NYSEARCA: XLE), investors can clearly see that the market is beginning to gain a preference for one over the other, as energy has outperformed mining by as much as 10% over the past month alone, which is where the question of whether gold can keep rallying or pull back is born.
