Gold Safe Haven

## Gold Safe Haven — Full Methodology

### Signal Logic

1. **VIX spike:** VIX rises > 20% in 5 trading days (fear event detected)

2. **Gold relative strength:** GLD outperforms SPY over the trailing 10 days

3. **Confirmation:** GLD closes above its 20-day SMA

### Entry Criteria

- Enter long GLD when all 3 conditions are met simultaneously

- Can use GLD shares, gold futures, or XAUUSD

### Exit Rules

- **Profit target:** 5% from entry

- **Stop loss:** 3% below entry

- **Time stop:** Exit after 30 calendar days

- **VIX normalization:** Exit if VIX drops below 15 (fear subsided)

### Position Sizing

- Allocate 10–20% of portfolio as a hedge position

- This strategy is meant to complement equity holdings, not replace them

### Why It Works

Gold has a historically negative correlation with equities during stress events. When VIX spikes, institutional money flows into gold as a safe haven. The correlation isn't permanent — it's strongest during acute fear episodes.

### Backtest Notes

Tested on GLD/VIX daily data from Jan 2010 to Dec 2024. Triggers 3–5 times per year on average. Works best during sudden market drops (COVID crash, SVB crisis). Less effective during slow grinding bear markets.