It’s an intriguing indicator.
While there are many economic indicators, tracking the flow of money often provides a more accurate sense of the market's direction.
This data compares the movements of the S&P 500 and gold prices, serving to distinguish between periods of economic recession and expansion. When this ratio exceeds 1, it signifies that gold’s growth rate has outpaced that of the S&P 500. Historically, whenever this phenomenon occurred, the asset market has invariably experienced a downturn.
Currently, this ratio is once again rising above 1, which suggests that caution is warranted regarding potential market shifts.
