The S&P 500 to gold ratio has reached 1.45, a level historically associated with significant market shifts, according to analyst Benjamin Cowen. This ratio, which has appeared at critical junctures in 1929, 1973, and 2008, often precedes major economic downturns. Cowen warns that the current ratio suggests a transition from a stock-dominated cycle to a gold-dominated one, potentially impacting asset allocation strategies.
Cowen highlights that the S&P 500, when measured against gold, has declined by 46% over the past four years, despite nominal gains. He suggests that if the ratio falls below 1.45, it could trigger a market correction similar to past events. Cowen also notes that gold has recently broken out against the stock market, indicating a possible sustained upward trend. Investors are advised to remain vigilant and consider the historical implications of this ratio as they navigate the current market environment.
S&P 500 to Gold Ratio Hits 1.45, Signaling Potential Market Shift
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