NFTRH+; this is what gold bugs MUST have in order to remain bullish

We’ve been tracking the Gold/SPX ratio as part of a host of other gold to market ratios. But this is the one that is closest to breaking down and given SPX status as the most watched index in the world, it’s very important because it will indicate whether confidence in the stock market (and the system of policy making, fiat money and the economy behind it) is intact or has failed into a post-bubble contraction.

Gold/SPX is down again this morning on the happy “fading inflation” headlines. Fed relief is in the air and stock market participants may or may not be readying a launch to a hysterical sentiment blow off.

But the ratio has thus far held its series of higher highs and lows. The green line and its green arrow touch points will be critical in maintaining or aborting a gold-bullish view. As yet, there is no change to that with the stock market at high risk and gold in a normal correction. But just so you know, if the ratio were to unexpectedly take out the noted level our view, short of a one or two day head fake, would change. It would have to change, at least temporarily, because one of the primary indicators to the positive side would have broken down.

If a reversal in the ratio back into gold’s favor is in the offing, this week could be the time with FOMC lurking in the wings.