Why Is Gold Outpacing the Stock Market?

٦ نوفمبر ٢٠٢٣

Looking back to 1928, when the time series for the S&P 500 began, U.S. equities have had an average annual price return of 5.9%. But gold isn’t far behind with an average yearly gain of 4.9%.

It can be instructive to reprice equities in gold terms by dividing the S&P 500 index by the dollar price of gold.



The S&P 500 to gold ratio has been through broad swings over the past century, with stocks falling by 86% in gold terms between 1929 and 1942; rising by 1165% versus gold from 1942 to 1967; falling by 95% versus gold from 1967 to 1980; soaring 4000% versus gold between 1980 and 2000; and then falling by 89% between 2000 and 2011.

More recently, the S&P 500 rose by 350% versus gold between 2011 and 2021 but has since dropped back by around 15%.



Gold tends to outperform stocks during periods of fiscal and monetary expansion, price instability, and periods of geopolitical conflict and uncertainty. As such, one might wonder if gold might be the outperformer for the remainder of the 2020s.

If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/

By Erik Norland, Executive Director and Senior Economist, CME Group

*CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc.
**All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.