Gold Beats the S&P 500

Lance Lewis  Oct 10, 2008 1:40 pm

Gold Beats the S&P 500
 
Sign that yellow metal is best hedge against coming inflation.
 

 
Spot gold rose $5.63 to $913.25 yesterday - a new closing high for the move since the September low.


Click to enlarge


For those keeping score at home, that means the gold price is now above the price of the SPX (909.92) for the first time since having fallen below it in the summer of 1990.

The last time we saw the dollar price of gold rise above the SPX after a long period of being below it was in summer of 1973, after which the price of gold more than tripled over the next year. The gold price would then remain above the SPX price for 17 years, ending in the summer of 1990.


Click to enlarge


Will we see something similar this time around? (i.e. Will gold tend to outperform stocks for the next decade or so, as it did after the summer of 1973?)

I suspect that’s going to be the case, given the long-term nature of the big secular bear market in stocks that began back in 2000 in “real” terms, and the big secular bull market in gold that began in 1999.
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Comments (6) See All Comments »
10-10-2008, 2:45 pm
C'mon, lets not talk like a gold bug!

Can we please discuss gold as we do many other trades? Not 30 years in the future, but NOW. Just as we do with stocks.

What exactly does gold beating the S&P 500 mean?!? yes f
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10-10-2008, 2:48 pm
C'mon, lets not talk like a gold bug!

Can we please discuss gold as we do many other trades? Not 30 years in the future, but NOW. Just as we do with stocks.

What exactly does gold beating the S&P 500 mean?!? yes f
Read More
10-10-2008, 4:35 pm
I agree with you about the coming inflation.

So currently I am trying to figure out two things:

1. What will be the signal that we have ended this deflationary liquidation? How much time will there be to make the switch to
Read More
10-12-2008, 4:50 pm
Your comment is not about free market trades; it is about an observation by government interference into and within otherwise free markets.

The G7 agreed to sell off Ag in an attempt to attract cash from all over the world to play within
Read More
10-13-2008, 7:06 pm
Do you believe GLD is a safe investment, or is the counterparty risk too high? I really don't want to have to safeguard physical gold and it's hard for me to put any higher level of trust in the companies that claim to store it for you in
Read More
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