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?
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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.
Posted by: noway | November 04, 2009 at 08:12 PM
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.
Posted by: time123 | November 04, 2009 at 09:38 PM
The price of oil is currently showing a big increase. Still, I think that platinum will be soon at the same price, don't you think?
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