{"id":1161549,"date":"2020-01-23T12:10:29","date_gmt":"2020-01-23T18:10:29","guid":{"rendered":"https:\/\/www.mining.com\/?p=763647"},"modified":"2020-01-23T12:10:29","modified_gmt":"2020-01-23T18:10:29","slug":"50-year-chart-shows-how-cheap-gold-price-still-is-relative-to-stocks","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1161549","title":{"rendered":"50-year chart shows how cheap gold price still is relative to stocks"},"content":{"rendered":"<p>The gold price was drifting sideways on Thursday, down some $50 an ounce from a <a href=\"https:\/\/www.mining.com\/iran-standing-down-drops-gold-price-by-most-in-6-years\/\">brief (but glorious)<\/a> near seven-year intraday high above $1,600 an ounce a fortnight\u00a0 ago.\u00a0<\/p>\n<div class='d-flex justify-content-center d-xs-block d-sm-block d-md-none'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>But the metal remains firmly in a bull market with a 20%-plus rise over the past year. Going back 20 years and the rally is even more spectacular considering at the turn of the century gold was trading for a relative pittance of $270 an ounce.<\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2020\/01\/This-50-year-chart-shows-how-cheap-gold-still-is-relative-to-stocks-1.jpg\" alt=\"\" class=\"wp-image-1012033\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2020\/01\/This-50-year-chart-shows-how-cheap-gold-still-is-relative-to-stocks-1.jpg 908w, https:\/\/www.mining.com\/wp-content\/uploads\/2020\/01\/This-50-year-chart-shows-how-cheap-gold-still-is-relative-to-stocks-1-300x215.jpg 300w, https:\/\/www.mining.com\/wp-content\/uploads\/2020\/01\/This-50-year-chart-shows-how-cheap-gold-still-is-relative-to-stocks-1-768x551.jpg 768w\" sizes=\"(max-width: 908px) 100vw, 908px\" \/><figcaption><a href=\"https:\/\/www.macrotrends.net\/1437\/sp500-to-gold-ratio-chart\">M<\/a><a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.macrotrends.net\/1437\/sp500-to-gold-ratio-chart\" >acrotrends<\/a><\/figcaption><\/figure>\n<p>Is gold overvalued at these levels? Has the rise been too far, too fast? Are gold bugs (once again) guilty of irrational exuberance?\u00a0<\/p>\n<p>In comparison to stock markets the answer is a resounding no. The gold price\u2019s underperformance relative to the record\u2013setting S&amp;P 500 Index is stark.\u00a0<\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>That implies a fair value for gold north of $2,400 which either means gold bugs\u2019 party has only begun or stocks are in for a real beating.\u00a0\u00a0\u00a0<\/p>\n<\/blockquote>\n<\/figure>\n<p>Today you need little over two ounces to buy the market. The ratio was the same in September 2007 when an ounce of gold could be picked up for less than $600.&nbsp;<\/p>\n<p>The average over the long term \u2013 and we\u2019re talking 90-years here \u2013 is 1.31.&nbsp;<\/p>\n<p>Since the US left\u00a0 the gold standard entirely in August 1971, it\u2019s 1.55. That implies a fair value for gold north of $2,400 an ounce which either means gold bugs\u2019 party has only begun or stocks are in for a real beating.\u00a0\u00a0\u00a0<\/p>\n<p>You can argue that during gold\u2019s spike in 1980 to $850 an ounce \u2013 in inflation-adjusted terms still the all-time high \u2013 it lost touch with stock values (and some would say reality) entirely.<\/p>\n<p>But the recent peak\u00a0 \u2013 when gold hit a record around $1,900 an ounce in 2011 \u2013 did not constitute a wild deviation from the norm and based on relative value could be in reach once again.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold vs the S&amp;P 500 since end of gold standard indicates price well beyond $2,000 to return to the historical norm. That, or stocks are in for beating.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[2849,949,369],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1161549"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1161549"}],"version-history":[{"count":4,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1161549\/revisions"}],"predecessor-version":[{"id":1161581,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1161549\/revisions\/1161581"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1161549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1161549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1161549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}