Chart Of The Day "Dow Vs Gold"

The following chart was buried in the comments from my previous post on gold (Gold’s Post-Bubble Performance In The UK, US And Japan. ). I think this perspective on the valuation of gold deserves "deserves" a sperate post. Further blogging activity will be light until 2009



Der nachfolgende Chart war in den Kommentaen zum letzten Goldposting ( Gold’s Post-Bubble Performance In The UK, US And Japan. ) vergraben. Denke der ist so aussagekräftig das das ich Ihn nochmal gesondert poste. Meine Blogginaktivität wird über die Feiertage bis Anfang 2009 minimal sein.



Chart Of The Day

How significant is this bear market? It all depends on how you measure. When measured in US dollars, the Dow currently trades 39.5% off its October 2007 record high. However, when measured with that other world currency (gold), the picture is actually more dismal. To help illustrate the point, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 10.5 ounces of gold to “buy the Dow.” This is considerably less that the 44.8 ounces it took back in 1999.

When priced in gold, the US stock market has been in a bear market for the entire 21st century.