Just a simple view of the Gold/SPX ratio as portrayed by GLD/SPY.
You may recall that the ratio – a key macro fundamental consideration for a bullish gold stock view – was constructive in 2018-2019 before the pandemic launched it upward and got it all bent out of shape. That killed the relative case for gold for going on 2 years now. Of course, in my book there is always a case for gold as a long-term value instrument (and pretty rock). But for a bullish gold stock view this ratio – among other indicators – must come in line.
The weekly chart shows that the stock market’s recent troubles have GLD/SPY elevated above the weekly EMA 10 and EMA 20. It has failed to do this and hold it since 2020. I don’t want to make a big deal about it, but I do want us to keep an eye on gold vs. stocks and indeed, vs. the whole raft of cyclical, risk ‘on’ and inflation-driven stuff. Gold is pulling back vs. silver, but silver in this phase is acting counter-cyclical but could still be a precious metals leader whenever the time is right. For now, just an FYI pictorial.