The SPX/Gold ratio is currently holding below the 23.6% Fibonacci level of the period during which gold outperformed US stock markets (July 1999-September 2011).
While this ratio won't tell us the direction of one market by itself, it can help identify potential inflection points. One only has to look at what markets did in January 2014 to see the arbitrage opportunity that can occur between stocks and gold. As we're approaching the end of the year, this might be something to keep in mind come January.
While this ratio won't tell us the direction of one market by itself, it can help identify potential inflection points. One only has to look at what markets did in January 2014 to see the arbitrage opportunity that can occur between stocks and gold. As we're approaching the end of the year, this might be something to keep in mind come January.
