Daily Gold Market Report

A Century of Shifting Fortunes
The S&P 500 and Gold in Historical Perspective

(USAGOLD – 11/14/2023) Gold is spiking as US inflation broadly slowed in October, which markets cheered as a strong indication that the Federal Reserve is done hiking interest rates. Gold is trading at $1958.56, up $11.64. Silver is trading at $22.75, up 42 cents. CMEGroup reports that since 1928, U.S. equities and gold have shown notable average annual returns of 5.9% and 4.9%, respectively. Analyzing equities in terms of gold, by dividing the S&P 500 index by gold’s dollar price, reveals significant fluctuations in their relative values over the past century. Key periods include a substantial decline in stock values relative to gold from 1929 to 1942, a sharp rise from 1942 to 1967, a dramatic fall from 1967 to 1980, a significant surge between 1980 and 2000, and a notable decline from 2000 to 2011. More recently, the S&P 500 gained significantly against gold from 2011 to 2021, but it has since experienced a decline of around 15%. Gold’s tendency to outperform stocks during times of fiscal and monetary expansion, price instability, and geopolitical uncertainty leads to speculation about its potential dominance over equities in the 2020s.