The Dow Jones Priced in Gold
- Posted by scheplick
- on June 19th, 2012
Gold is often considered mankind’s natural store of value as it is rare, and nearly impossible to manipulate. J.P. Morgan himself once said, “Gold is money, and nothing else.” So what if the markets were priced in gold? Let us have a look at the Dow Jones:
Priced in dollars, the Dow Jones is trending up, and priced in gold it is trending down. The green line represents the price of the Dow Jones in US Dollars, and the blue line represents the Dow Jones priced in grams of gold. What story does this tell about the value of the dollar, and the perceived financial risk worldwide, if any at all?
If you are interested in exploring this relationship further, check out J.C. Parets, the author of All Star Charts, as he is the blogger doctrinaire for viewing the markets priced in gold rather than in dollars. Here are some other resources below:
AllStarCharts on the Dow Jones priced in Gold
Dow Jones to Gold Ratio since 1915 from MacroTrends
200 years of the Dow Gold Ratio
Do it yourself: Compare ETFs like $GLD with $SPY or $DIA
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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