S&P 500 Priced in Gold

With equities correcting over the last few weeks and gold rallying to record highs, the price of gold has once again exceeded the price of the S&P 500.  It now takes 0.96 ounces of gold to buy the S&P 500.  This is considerably less than the long-term average of 1.74 since 1980, and a far cry from July 1999 when it took over 5.5 ounces of gold to buy the S&P 500.  The question now is, if gold eclipses 1,100, will its time above that level be as brief as it recently was for the S&P 500?

Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Comments

[noway]

What long term average? There are only 2 points in the chart when S&P traded at 1.74. You have so much deviation from your "average" that it is useless.

[time123]

Excellent observation.

The S&P is cheap by this measure, and it may become even cheaper if inflation data starts moving higher later this month and gold jumps higher from here.

I believe it is important to use market timing signals and profit both from the upside and downside of gold and the stock market.

Consider http://invetrics.com

Its DJIA is up 68% so far this year, and it is free of charge to individual investors.