$XAU/$INDU ratio … learned from Martin Pring – the monthly period of Gold to the Dow, using a crossover w/ the 48M sma as a signal to over/under-weight gold. Flipped to OW in Feb. Note: brief head fake in 2020 … but often the signal is long lasting. pic.twitter.com/YubzOGXbo1
— brian.joyce.nasdaq (@Nasdaqbjoyce) March 8, 2022
Today’s Chart of the Day was shared by Brian Joyce (@Nasdaqbjoyce). It’s a ratio chart of Gold vs. the Dow Jones Industrial Average, over the past five decades ($XAU/$INDU). Gold is up more than 10% year-to-date, while the Dow is down 10% over the same period. Brian points out that Gold’s recent bout of outperformance could be the start of a longer-term trend, as this ratio recently crossed above its 48-month moving average (green). This indicator saw a false signal in 2020, but over the past 50-years, it has served as a pretty good guide on being overweight/underweight Gold.