Is J.C. Penney a better bet than gold?

FORTUNE – One of the wildest months the gold market has seen in years is coming to an end. The yellow metal has been recovering from its biggest drop in 30 years after prices plummeted 13% in mid-April. But while gold continues to rebound strongly, it’s unlikely to return to its bull run anytime soon.

In fact, it may not be that far-fetched to say J.C. Penney is looking to be a better bet than gold these days.

Last week, billionaire investor George Soros bought a $7.9% stake in the retailer, making him the troubled company’s fourth-largest shareholder, according to Bloomberg’s estimates. His vote of confidence came about two weeks after J.C. Penney CEO Ron Johnson resigned. A former Apple (AAPL) executive, Johnson instituted ambitious changes to remake the chain but sales continued plummeting during his year and a half on the job.

Though entirely unrelated, Soros’s bullish take on J.C. Penney comes as he deepens his bearish take on gold. In 2011, as the precious metal surged to record highs, he sold various gold-related investments worth $800 million. And when prices steadily declined during the end of 2012, he embarked on another big selloff, cutting by half his investments in the SPDR Gold Trust (GLD), one of the most widely held gold-backed ETFs.

Soros isn’t the only one down on gold, while betting J.C. Penney (JCP) could turn business around under new CEO Mike Ullman. Coincidentally, the same week Soros backed the retailer, Goldman Sachs (GS) was nearing a financing deal with the cash-strapped company. Ullman has focused on fixing the company’s finances by drawing $850 million from the company’s credit line, a JPMorgan Chase analyst notes. Ullman also reversed Johnson’s avoidance of promotions — he’s raised some prices more than 50% with plans to reduce other prices later so it appears the retailer is giving a discount. On Monday, J.C. Penney said it secured a $1.75 billion loan from Goldman as it struggles to remain solvent.

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While this signals that Goldman may think J.C. Penney could turn itself around, it comes as the investment bank shies away from gold. The positions are entirely unrelated, of course, but it’s interesting to note that a precious metal that saw gains for 11 consecutive years has been sliding against a renewed faith in one of the most troubled retailers.

To be sure, gold prices have recovered a bit recently. Bullion has abruptly rallied 11% since reaching a two-year low on April 16, but many analysts say that run likely won’t last long. The big drivers lifting gold recently have more to do with seasonal factors than any fundamental change in the market. Thanks to wedding season in India that peaks next month and lasts through June, prices for the precious metal have risen higher. In the world’s second-most populous country next to China, gold is often bought to give brides at Hindu wedding ceremonies.

And while Goldman last week exited its bet on lower gold prices after advising investors to sell earlier this month, the bank still thinks further declines are likely. Which is unsurprising, given the many factors that had been driving gold down are still present.

Investors typically turn to gold when the economy slows or when they want to guard their investments against rising inflation. Gold peaked in September 2011, trading at more than $1,900 an ounce as several central banks around the world, including the U.S., launched aggressive plans to boost their economies by essentially flushing them with cash. Although they were intended to boost their economies, investors have realized the measures likely won’t push prices nearly as high as most had expected.

And even though many of Europe’s economies are still quite a mess with serious debt problems, the U.S. economy is doing relatively better. Many investors have dumped gold for riskier assets in the stock market, which has repeatedly soared to record highs since the start of the year.

So if gold is to go anywhere from here, think down.

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