Hyperbole of the title aside, the SPX/Gold ratio should be watched closely now
Or if you prefer, you can flip it over and watch the Gold/SPX ratio, which I’ve been doing with this daily chart. This is only one of several macro market indicators that need to turn in favor of gold in order to set the gold stock sector on a tradeable rally at least, new bull market leg at best.
Those indicators are beyond the scope of this article about gold and its rival for preeminence in the big picture macro, the S&P 500.
So let’s flip back to the doom side and dial it out to the big picture. While gold attempts a relative move on the chart above, the long-term SPX/Gold ratio chart has bounced as expected (the precious metals badly needed a correction in 2026). The ratio remains under its Dome of Doom (DoD).
A failure back into its bear phase by the SPX/Gold ratio would highlight the gold stock sector at a time when the market’s 2026 leaders, namely Semi, AI and Tech in general, are crashing back to earth.
While I expect the broad stock market to stabilize into its positive seasonal (on average) – SPX is multi-sector, after all – resumed outperformance by gold would once again echo the 1970s, as the 2025 phase did.
This is not to say that the SPX/Gold ratio must hold below the Dome’s roof in order to remain gold-positive on the big picture. It merely needs to hold below the last highs in the 2.3 to 2.4 range. But right here and now would be a handier and less painful area for gold bugs, if gold regains its outperformance to the broad stock market.
The above is a simple visual presentation of a counter-cyclical, counter-risk asset vs. a cyclical risk asset. Nothing has changed since gold took over the macro in 2022, the same year another important long-term indicator confirmed the new macro, as bonds entered a secular bear market and long-term Treasury yields entered a secular upturn.
Lest you think that last sentence was uttered by a perma-bear, I just wrapped up a long trade in 7-10 year Treasury bonds today. But again, it’s probably time we get back to the new macro’s main themes.
Bottom Line
Amid stock market stress, gold has a chance right here and now to reassert macro leadership, keeping SPX neatly below its Dome of Doom. The precious metals complex has been quite oversold of late and was due for a rally. Now we will watch for follow-through, on both the nominal precious metals and their status vs. the broad stock market.
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