US stocks struggled to stay above water on Friday of last week. Pressure seemed to mount from online retail giant Amazon, Inc. (AMZN) announcing an unprecedented bid to buy Whole Foods (WFM) for a whopping $13.7 billion.

The news of the merger weighed heavily on other retailers in the US, sending the entire consumer staples sector falling more than 1.1%, thereby making it the worst performer out of the S&P 500’s eleven separate sectors.

For the week, the both the Nasdaq 100 ended essentially flat, and the S&P 500 and Down Jones ended up slightly. Although stocks bounced off their early-morning lows on Friday, weakness was definitely prevalent in the market. The Dow Jones Industrial Average managed to lead the pack by making a new all-time high on Thursday.

In terms of macroeconomic news, on Wednesday of last week the Federal Reserve raised its benchmark lending rate by a quarter of a percent, as expected. The reaction in the US stock market was initially mixed, but stocks mostly finished higher after the rate hike announcement.

On the fixed income side, the yields on the 30-year US treasury bond and the 10-year US Treasury Note absolutely soared in response to the rate hike. For precious metals, however, the result was the opposite. Spot gold saw an initial spike to $1,284.20 per ounce, but then it rapidly sold-off to settle around $1,260 per troy ounce. Generally speaking, rising interest rates make it more expensive to hold and purchase assets like gold, because borrowing money becomes more expensive and gold is a non yield-bearing instrument. As such, a gold sell-off in light of an interest rate hike is not overly unusual.

Besides the FOMC announcement and weekly jobless data, traders had difficulty finding other positive signals in a batch of economic data last week. “Aside from the weekly jobless claims, the majority of the economic data released this week–inflation, retail, housing–was below expectations,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. Moderate to weak economic data seems to have facilitated the decline for stocks.

Friday of last week was also what’s known as “quadruple-witching day,” where futures, futures options, index options, and individual stock options all expired on the same day. The famous JP Morgan analyst Marko Kolanovic, who accurately predicted many turbulent market days like August 24^th, 2015, noted how over $1.3 trillion worth of S&P 500 options expired on Friday. As traders closed out and rolled their positions to accommodate for the expiration, market conditions were likely altered during Friday’s trading. This also likely led to increased volatility and unusual trading activity in the market.

Looking ahead, there are a host of potentially market moving events this week. Minutes from the Bank of Japan will be released later this evening, and the Reserve Bank of New Zealand will make an announcement on Tuesday regarding its Official Cash Rate.

Moreover, traders in the US will be eyeing monthly jobless claims data as well as retail sales data in an attempt to gauge where the economy is heading. However, if economic data keeps coming in below expectations, further weakness in the equity market could easily spark a rally in safe haven assets like gold. Even with an interest rate increase, gold showed its strength and beauty as an investment by managing to close out the week above $1,250 per ounce.

The Federal Reserve recently approved a second interest rate hike for 2017. Additionally, they signaled plans to reduce their $4.5 trillion balance sheet. Essentially, these plans add up to a departure from the easy money policy that has reigned in recent years.

During times like this many investors question the value of precious metals as an investment. The reason: as interest rates increase other interest-bearing investments like bonds and dividend-paying stocks also raise their rates. This move increases the opportunity cost of gold. That is, allocating one dollar to gold means foregoing the opportunity to put that same dollar to work with one of these bonds or dividend stocks.

However, does the data agree with the popular sentiment that rising rates means falling gold?

In short, the answer is no. Between April and November of 2004, as the Fed repeatedly raised rates gold exhibited a similar pattern of a gradual rise. This one example serves as a reminder that conventional wisdom lacks wisdom.

The broad belief that a negative correlation exists between gold and interest rates is simply false. Case in point: from 1970 to 2015 the price of gold and interest rates experienced only a 28% correlation. Moreover, periods of surging gold prices have been characterized by similarly aggressive rate hikes. Throughout nearly all of the 1970’s, interest rates quadrupled while gold made an incredible journey from $50 an ounce to $850 an ounce.

The surprising durability of this myth is problematic for two reasons. First, it misdirects investor’s buying decisions. Second, the mere presence of the myth distracts from the clearer truth; gold prices fluctuate based on marketplace demand.

This myth is, unfortunately, likely to persist despite that on the heels of the Fed’s latest decision gold prices have risen. This jump in price stems from renewed fears about the health of the U.S. economy. Though the Fed’s move inspires some confidence, recent metrics are casting doubt on the likelihood that the Fed will approve a second hike in September. “Right now the market is doubting they’re going to be able to do a hike in September. That’s because U.S. economic data has been weak,” remarked a senior market strategist at RJO Futures.

The larger picture may portend a market correction thereby boosting demand for gold further. The easy money policy of the Fed has emboldened and empowered investors to commit more money to the equities market. Why? Because as the government purchases bonds investors migrate to investments with a greater return (albeit at a higher level of risk).

These inflows have been driving up stock prices to levels which some contend are outsized relative to the inherent value of the underlying assets.  As policymakers resolve to remove this support the stock market may experience outflows causing share prices to drop. “Don’t be mesmerized by the blue skies created by central bank QE and near perpetually low-interest rates. All markets are increasingly at risk,” remarked the co-founder of Pacific Investment Management Company.

Investing often means challenging assumptions and questioning norms. As major economic policies shift revisit your preconceived notions and consider how your portfolio could be improved.

It’s the first rule of investing. Keep your assets spread across various investments to mitigate downside risk. Traditionally, investors have followed a simple 60/40 portfolio design. This strategy means holding 60% of your portfolio in stocks and 40% in bonds. Different factors influence these two groups. Therefore, a drop in one doesn’t necessarily precipitate a drop in the other. Diversification is a simple strategy that works. The only problem? Sometimes it fails investors.

Markets can become volatile as seen by the Great Recession. During periods like this diversification begins to lose its effectiveness. Recent research from BlackRock determined that “increases in volatility are often naturally related to increases in correlations.” Why would heightened correlations be a problem for investors? When different investments start to behave in a similar fashion risk increases. Factors driving down one investment will have the same effect on another.

The same body of research from BlackRock illustrates that during the two significant bear markets of the Tech Bubble (2000-2002) and the Great Recession (2007-2009) “correlations between many individual investments and even asset classes spiked.” This phenomenon presents investors with a problem: diversification is least effective when it’s needed most. Imagine a fire extinguisher that risks exploding in warm environments.

For example, during the Great Recession, international stocks exhibited a correlation of 0.93 to mid-cap stocks. A perfect correlation is 1.0 meaning that these two classes moved in near lockstep with one another.

What’s the solution?

The researchers suggest turning to alternative investments. This strategy can bolster diversification, so a portfolio can withstand dramatic market downturns. Commodities like precious metals fit into this category. Major institutions like Harvard and Yale have discovered the value of allocating a portion of their endowment to these alternative investments. In fact, over the past 25 years, both schools have increased their exposure to alternatives which also include instruments like futures and short positions.

The research supports their strategy. During the recession, the S&P 500 Index experienced a drawdown of 50.9%. This dramatic fall means that the index needed to deliver a return of 103.9% just to recover lost ground. However, the Dow Jones Credit Suisse Index, which includes alternatives, lost just 19.7% in the same period requiring only 24.5% to recover. What increased by 25.63% during this period? That’s right, gold surged.

During a major market downturn, alternatives make a difference.

Many investment instruments lumped into the “alternative” category are complex and speculative. Examples of these esoteric offerings include derivatives, convertible assets, and global macro strategies. Therefore, investors must be comfortable with the terminology and mechanics of the methodology. However, commodities like gold offer an easy (and easy to understand) way to begin capturing alternatives in one’s portfolio. Including this one additional asset class in a basket otherwise consisting only of stocks and bonds can have a measurable impact on risk.

Today central banks are starting to remove support thereby elevating risk. Make diversification work by including more asset classes and ensuring that when the market falls your portfolio stays afloat.

Despite a culmination of highly anticipated market-moving events last week, US equities were little changed for much of the week. During the first four trading days last week, the S&P 500 fluctuated within a ten-point range, or about 0.40%, which is extremely narrow.

The Nasdaq 100, however, continued to blaze a new trail into uncharted territory by making new all-time highs throughout the week before finally taking a steep dive during Friday’s trading.

Many market participant ants were expecting Thursday to be one of the most volatile trading days of the year due to the combination of political events taking place. However, the result was less dramatic than expected for equity markets around the world.

Former FBI director James Comey’s testimony before the Senate seemed to have a negligible impact on the equity market, despite the hyped-up anticipation. Investors from across the world tuned in to watch Comey’s live testimony looking for any clues as to what happened in private meetings with President Trump. And despite all the anticipation and viewership, US stocks were marginally higher without much volatility or rapid, knee-jerk movements.

Similarly, the UK election seemed to be somewhat of a non-event as well for US equities. For European equities, The FTSE 100 only fell 0.40% during polling and ended up finishing about 1% higher after the election. What came as a bit of a surprise, current Prime Minister Theresa May lost 12 seats in Parliament, resulting in what is called a “hung Parliament.”

“From a market perspective, a hung Parliament is seen as one of the worst possible outcomes to this election, because it just injects further uncertainty into the United Kingdom as it heads into Brexit negotiations with the European Union,” wrote Jameel Ahmad, vice president of market research at FXTM.

Before the election, however, analysts at FXTM noted how traders were heavily betting on a landslide victory for Theresa May and her party. With Brexit talks just around the corner, this election outcome unequivocally complicates the global political environment.

To cap off an already lackluster week, shares of technology companies dramatically declined on Friday, putting the Nasdaq 100 off more than 3% at one point. The stark sell-off was led by the largest company in the world by market capitalization, Apple Inc. Analysts chalked last week’s sell-off to “profit-taking” after an enormously strong year-to-date rally in technology companies. There was no concrete news that seemed to instigate the severe sell-off.

In the precious metals market, gold made a new year-to-date high of $1298.8, stopping just shy of the $1,300 level on Tuesday of last week. Gold has since declined but is showing signs of strong support well above $1,250. When the United Kingdom decided to leave the European Union last year, the event dubbed “Brexit”, gold soared to new highs. Given that the UK election resulted in a hung parliament, it seems reasonable to see further upside in gold given the increased uncertainty. 

In the days ahead, traders have their eyes on a two-day Fed policy meeting starting on June 14^th. Fed fund futures traded on the CME showed a 95.8% probability of an interest rate increase.

In the simplest form, there are two basic strategies for investing, technical and fundamental analysis. Technical analysts seek opportunities to make money by watching price movement patterns. These traders aren’t concerned with broad economic factors or monetary policies that may have implications for gold. When you think of technical analysis picture someone sitting behind three screens covered with charts and intimidating graphs.

Fundamental analysts take the 30,000-foot view. Rather than immerse themselves in the minutia of decimal points and short-term price movements, they examine the market as a whole. When making an investment in gold they make a judgment on whether the price is reflective of the intrinsic, or fundamental value of the asset.

Why do these two groups disagree on the best method for investing? Technical analysts believe that the market is efficient. That is, the market, at all times, prices in all the pertinent information regarding an asset. Under this assumption, there is no way to make strategic investments based on fundamentals because the current price accounts for the most likely future outcome. Meanwhile, fundamental analysts believe that a read of the general market can yield opportunities for price appreciation.

So, who is right?

The debate will never end. Both sides can point to gains and claim success. In the end, the question of which is better is best answered by considering one’s risk tolerance. Technical analysts live in the narrow spaces between the dots on their charts. Fundamental analysts make a trade then wait, sometimes for years.

What can these two different styles tell us about the future of gold? Recently, a technical analyst with Evercore ISI cited “symmetrical triangles,” “reverse head-and-shoulders bottom,” and a “double top.” What do all these measurements add up to? He sees gold as “quite bullish.”

Much of this analysis comes from a common technical measure of momentum. In short, an asset that’s rising in value is likely to continue rising according to technical analysts. Given gold’s recent rise many such analysts have high expectations for growth.

How does this compare to a fundamental analysis of gold? Interestingly, the perspective on the other side of the table is equally positive. Looking to 2017 The World Gold Council has shared an optimistic outlook explaining that new markets, Asian growth, and rising inflation will all buoy the metal’s performance for the year.

These symmetrical perspectives illustrate how investors can take cues from both camps. When technical and fundamental analysts agree there’s good reason to be bullish on an asset. When considering an investment take a moment to see if the charts match the heart. Do the numbers, movements, and prices reflect your inward feeling about the investment?

Many brokers have already made their decision. “There’s no denying, gold has its buy boots on,” remarked one trader. Today, inflows to increasing as more investors seek the benefits of growth seen in the last several weeks. When the market is high even technical and fundamental analysts can agree it’s time to buy.