S&P vs Gold RatioMany are calling for a top in gold. Others have already taken profits and are now in the position where they must chase to re-enter. Still others are using relative strength to reason that gold is overbought and must correct.
In 2011, gold reached a price of $2000. The ratio between SPY and GLD was at 1.57. Today, with gold trading at or around $2000, that same ratio is at .57, one-third of where it was in 2011.
What could that mean? Well, it could mean that gold is still well-undervalued relative to SPY, and the ratio can double or triple from here before we hit 2011 levels. Think about that top pickers!
Mish Schneider (MarketGauge)