Sunday, 6 January 2013

The S&P 500 / Gold Ratio (as of 2 Jan-13)

The S&P 500 composite index to Gold ratio is calculated monthly based on data from Professor Robert Shiller's website and The World Gold Council. The gold price is measured in USD per ounce.

As of 2 January 2013 the ratio is 0.86, up from the 0.80 reported on 28 November 2012 as the S&P 500 increased more than the gold price (2.82% vs 2.19%). The ratio has fluctuated within the 0.80 to 0.86 range for the last ten months and remains substantially lower than both the average and median based on data starting in December 1978. Adjusting the ratio for the high market valuation of the S&P 500 during the three year period 1998 to 2000, the average S&P 500/Gold ratio is 1.34. The current ratio of 0.80 is hence 35.43% lower than this adjusted ratio. The decline in the ratio during the last 12 years or so was driven by a considerable appreciation of the gold price in U.S. dollar terms.

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