GOLD/S&P500 ratio showing that stocks continue to be dominant

2023年2月28日

We see a lot of debate on what will be a better investment this year, Gold or stocks. To approach this debate in a more effective way we took the XAUUSD:SPX ratio going back a century into the early 1900s. When the ratio rises Gold is outperforming the S&P500 (SPX), and vice versa when it declines.

A good indicator of a confirmed S&P500 (stocks) outperformance is when the 1M (monthly) MA50 (blue trend-line) crosses below the 1M MA100 (green trend-line), forming a Bearish Cross. Similarly Gold has a confirmed outperformance over stocks when the MA50 crosses above the MA100 (Bullish Cross).

Right now stocks have been outperforming since September 2011 and even though the MA50 and MA100 have converged the most since their Bearish Cross, we don't have a confirmation yet that this will change.

For now stocks remain the better investment.

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