Below is a long-term monthly chart of the Dow Jones Industrial Average price relative to that of Gold's. As one can see, Gold has been outperforming since roughly 2001, after underperforming from roughly 1981-2000:
chart courtesy of StockCharts.com
Below is a long-term monthly chart of the Crude Oil price relative to that of Gold's. As one can see, the Gold price has been bouncing around in a range since 1990, and is now at a slightly subdued level:
chart courtesy of StockCharts.com
One can infer many different things from these two charts. With regard to the first chart, one way to view this is to see how "hard assets" are performing relative to "paper assets." With regard to the above chart, one can see how Gold is performing to another commodity, crude oil. From this crude oil to Gold price comparison, one may interpret Gold's unique "safe haven" value. If one chooses to view the chart in this manner, one could draw the conclusion that from a "safe haven" standpoint, Gold's price is not reflecting much of a "safe haven" value. This view is consistent with previous comments I have made with regard to Gold.
I strongly believe that the strongest driver of Gold's price (especially relative to other assets) will be if/when it is viewed as the ultimate "safe haven" asset. This condition would likely occur concomitant to a repudiation of "paper" assets.
SPX at 1098.76 as this post is written
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