Glossary term
XAU (Gold and Silver Index)
The PHLX Gold/Silver Sector Index, tracking the 30 largest precious-metals miners — Newmont, Barrick, Agnico Eagle, Wheaton, Pan American. When XAU breaks out against a weakening DXY, the Money Temperature reads stress-regime signals. XAU is one of eight instruments feeding Closelook's macro temperature composite.
Definition & Context
XAU is the Philadelphia Gold/Silver Sector Index, a capitalisation-weighted index of 30 large-cap precious-metals mining companies listed on the Nasdaq. It is a leveraged proxy for gold and silver prices — XAU typically moves 2–3x the underlying metal because mining company earnings are highly sensitive to price changes above operating cost. During gold bull cycles (1979–1980, 2001–2011, 2018–2020) XAU has delivered multi-hundred-percent returns; during bear cycles it has drawdowns well over 70%.
XAU is a regime tell. Gold and gold miners tend to outperform when real yields compress, the dollar weakens, or tail-risk premium spikes in equity vol. A sustained XAU breakout to multi-year highs while the DXY is falling is one of the classic macro regime signals — it usually coincides with stress-regime classification across other indicators. Conversely, XAU rolling over while equity indices stay strong is a tell that the dollar is re-strengthening and risk appetite is holding.
Why It Matters for Investors
Closelook’s Money Temperature composite includes XAU as one of eight macro instruments alongside DXY, the Yield Curve, VIX, HYG (high-yield credit), copper, Bitcoin and the S&P 500. XAU’s role is to capture flight-to-hard-asset behaviour that other instruments miss. When XAU ranks in the upper quartile of its one-year range while DXY is in the lower quartile, the Money Temperature shifts meaningfully toward stress.
Related Concepts
XAU is one of the Sentinel Tickers that feed Money Temperature; it reads inversely to DXY and informs Market Regime classification.