The S&P 500 tracks the 500 largest companies in the United States. When it rises, the economy is generally doing well and investors feel confident. When it falls, it signals concern about the economy or corporate earnings.
How does it affect gold?
Gold and the S&P 500 often move in opposite directions — but not always.
When stocks fall sharply, investors get scared and buy gold (safe haven). When stocks rise strongly, investors prefer stocks over gold.
However, both can rise together when inflation is high (investors want protection) or both can fall in a severe crash (forced selling of everything).