Stocks vs gold: the long view
February 3, 2025 · Editor
Two different worlds
In dollars the S&P 500 trends relentlessly higher. In gold it cycles. The Dow / Gold ratio (a close proxy for stocks vs gold) has hit major peaks roughly every 30–40 years:
- 1929 peak: ~18 oz to buy the Dow - 1966 peak: ~28 oz - 1999 peak: ~43 oz (the all-time high) - 2011 trough: ~6 oz - 2024: roughly 16–18 oz
What it means
If you'd held the S&P 500 from 2000 to 2011, you would have made money in dollars and lost roughly 80% of your purchasing power in gold. From 2011 to 2021 stocks crushed gold. Since 2022 gold has been clawing back ground.
The lesson is not "gold beats stocks" or "stocks beat gold". It's that the relationship cycles, and what looks like a permanent bull market in one currency can be a brutal bear market in another.