The firm noted that explosive prices are associated with low future returns.
The S&P 500 index and gold are at risk of being in a bubble, according to the latest note by the Bank of International Settlements (BIS).
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The BIS pointed out that the S&P 500 index and gold have exhibited “explosive behavior” jointly for the first time in the last 50 years.
“A widely used statistical test to detect the explosiveness of a price process suggests that both the S&P 500 and the price of gold have entered explosive territory in recent months,” BIS said.
The firm noted that explosive prices are associated with low future returns.
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