- Write by:
-
Wednesday, March 31, 2021 - 6:44:54 PM
-
757 Visit
-
Print
Mining News Pro - Gold has been flirting with a bear market this week with the price down nearly 20% from the intra-day high of $2,089 an ounce reached in August last year.
Still, bullion remains up nicely from a year ago and on a longer time horizon has performed in a way that should satisfy most gold bugs.
But in comparison to stock markets, gold doesn’t quite look like the store of value or lucrative investment it is made out to be.
Gold underperformance relative to the S&P 500 Index is striking and even at its record high was a bargain on an historical basis.
Today, you need just over 2.3 ounces to buy the market. The ratio is now back to where it was in August 2018 when an ounce of gold could be picked up for $1,200.
The ratio today is also on par with that of August 1971, when the US left the gold standard and gold was pegged at $35 an ounce. The average since then is 1.56.
You can argue that during gold’s spike in 1980 to $850 an ounce – in inflation-adjusted terms still the all-time high – it lost touch with stock values (and some would say reality) entirely.
But even during the August 2020 peak when gold averaged $1,968 for the month did it return to the historical ratio.
All things being equal at today’s S&P500 index approaching 4,000 points, the fair value for gold is north of $2,500 an ounce, which either means gold should return to an uptrend soon or stocks are in for a real beating.
Short Link:
https://www.miningnews.ir/En/News/611976
Copper briefly traded through $10,000 a ton as investors raised bets on Federal Reserve rate cuts, and Goldman Sachs ...
China’s central bank added 60,000 troy ounces of gold to its reserves in April, official data showed on Tuesday, ...
Gold rose after mixed signals from the US, where optimism is growing the economy is on target for a soft landing as the ...
Executives from Saudi Arabian mining company Manara Minerals are in Islamabad to continue talks about buying a stake in ...
Harmony Gold said on Thursday an employee working on planned rail maintenance had died at its Mponeng mine in South ...
Albemarle, the world’s largest producer of lithium for electric vehicle batteries, could look at reducing capital ...
Emerging North American gold producer Contango ORE is boosting its landhold in Alaska with the acquisition of Canada’s ...
Gold fell, with market watchers saying the previous day’s rally in response to Federal Reserve Chair Jerome Powell’s ...
Barrick Gold Corp.’s chief executive officer says the gold miner will continue to host virtual-only annual general ...
No comments have been posted yet ...