Ben Bernanke is expected to step down as Chairman of the Federal Reserve within the next few weeks. And he’s expected to be replaced by current Fed Vice Chair Janet Yellen.
According to UBS’s Julian Emanuel, the first few months of a new Fed Chair’s term are marked by a very specific type of volatility in the markets.
Specifically, gold prices will rally faster than stocks or stocks will fall faster than gold.
It happened with Arthur Burns, Paul Volcker, Alan Greenspan, and Ben Bernanke.
“If history is a guide, the markets will test Yellen’s leadership and communication skills in short order,” writes Emanuel. “There is no honeymoon.”
Gold is often considered a proxy for investors concerns. Not everyone agrees with this idea.
Still, it’s an interesting pattern to ponder.