Peter Schiff Spots Great Divergence In Gold, Bank Stocks: 'Old Fortunes Will Be Lost And New Fortunes Will Be Made'

Peter Schiff, chief economist and global strategist at Euro Pacific Capital, has highlighted the contrarian price movements in gold stocks and banking shares.

"#Gold stocks are hitting new 52-week highs today as #bank stocks are hitting new 52-week lows. This is not the end of this rotation, but the beginning," Schiff tweeted.

Also Read: How To Invest In Gold

U.S. markets ended in the red on Thursday as concerns regarding the banking sector gained momentum following PacWest Bancorp's PACW move to explore strategic options. PacWest shares closed over 50% lower while Western Alliance Bancorporation WAL shares lost over 38% on Thursday.

At the same time, gold stocks like Barrick Gold Corp GOLD, Newmont Corporation NEM and Kinross Gold Corporation KGC recorded gains.

"The stocks that lived by the bubble are dying as the air comes out. Old fortunes will be lost and new fortunes will be made," Schiff said in his tweet.

Price Action: Gold prices are set for their biggest weekly gain in almost two months as hopes of a pause in the Federal Reserve’s interest rate hike cycle and banking sector concerns boosted the safe-haven appeal of the commodity, reported Reuters.

Spot gold was trading 0.05% lower near the $2,050 per ounce level during Thursday morning Asian trade. Earlier, the yellow metal breached the $2,072 per ounce level, nearing its record high of $2,072.49 per ounce.

The SPDR Gold Trust GLD and the iShares Gold Trust IAU gained over 0.7% on Thursday.

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