Gold Ratios

[DarkRange55]

S&P-to-Gold Ratio


S&P-to-Gold Ratio = (S&P 500 Index Level) ÷ (Gold Price in USD per oz)


The S&P-to-Gold Ratio measures the balance between equities and gold across financial history. By dividing the S&P 500 Index level by the price of gold per ounce, it compresses the tradeoff between productive, income-generating paper assets and a non-yielding but durable store of value into a single number. Unlike a return series, the ratio is an indicator: it reflects shifts in relative valuation and sentiment, not a compounding stream of wealth.


For decades before 1971, the ratio was constrained by the gold standard. With gold pegged at $35 per ounce under Bretton Woods, movements in the ratio were almost entirely driven by equities. During the Great Depression, the ratio contracted as stocks collapsed, even though gold's price was officially fixed (later revalued to $35 under Roosevelt). Through the post–World War II boom, stocks surged while gold remained pegged, causing the ratio to climb steadily higher. This apparent equity dominance was artificial, because gold was suppressed by the fixed exchange system.


The Nixon Shock of 1971 ended this artificial constraint. Once gold was allowed to float, the ratio became a truer measure of investor psychology. The 1970s stagflation decade drove gold up more than 20-fold at its peak while equities stagnated, collapsing the ratio toward 1 by 1980. In the two decades that followed, disinflation, productivity gains, and expanding valuations pushed equities into one of their greatest bull markets, while gold stagnated, lifting the ratio above 5 at the dot-com peak in 2000.


In the 21st century, the ratio has oscillated with financial crises and monetary interventions. During the global financial crisis of 2008 and the European debt crisis, the ratio contracted sharply as investors sold equities and sought safety in gold. By 2011, as gold hit record highs, the ratio again neared 1. In the 2010s, QE-driven equity gains pushed the ratio higher, before the 2020 pandemic briefly crushed it again. The subsequent equity rebound, combined with later inflation and record central bank gold buying, has left the ratio fluctuating in the 1.5–2.5 range through 2025.


The takeaway is that the S&P-to-Gold Ratio is not a forecast model or an investable product — it is a barometer of confidence. High ratios signal optimism in equities, low inflation, and confidence in fiat stability. Low ratios reflect stress, inflation, or currency distrust. Investors use it as a regime gauge: not to compound wealth directly, but to contextualize risks, identify turning points, and understand the cyclical balance between paper assets and hard assets.


⸻


Key Details & Historical Anchors • Definition: (S&P 500 Index Level) ÷ (Gold Price in USD per oz). • Price-only vs. total return: The common ratio uses the S&P 500 price index (no dividends). A total-return variant gives a more realistic sense of wealth creation. • Splits/spinoffs/mergers: Automatically handled in S&P index methodology. • Inflation lens: Both are nominal; use CPI-adjusted series for "real" comparisons.


Historical Anchors: • 1930s: Stocks collapsed, gold fixed; ratio shrank despite peg. • 1940s–1960s: Postwar equity boom, ratio steadily rose under fixed $35/oz. • 1980: Ratio near 1 as gold spiked during stagflation. • 2000: Ratio above 5 at dot-com peak. • 2011: Ratio dipped back near 1 with gold > $1,900/oz. • 2025: S&P 500 ≈ 6,520, gold ≈ $3,662.50/oz, ratio ≈ 1.78.


Price Performance Comparison: • Equities: 1928–2024, total return ≈ 9–10% nominal annually (~6–7% real). Compounding powered by dividends and reinvestment. • Gold: 1971–2024, ≈ 7–8% nominal annually (~3–4% real). Preserves purchasing power but does not compound wealth like equities. • Cycles: Gold outperformed in 1970s and 2000–2011; equities outperformed in most other spans. • Purchasing power: Gold maintains a "constant basket" over centuries; equities multiply wealth dramatically over decades.


Interpretation Cheat-Sheet: • High ratio → equities strong vs. gold; optimism, growth, disinflation. • Low ratio → gold strong vs. equities; inflation, crisis, distrust in fiat. • Extremes often mark turning points (dot-com, 1980, 2011).


Worked Example: • S&P 500 = 6,520 • Gold = $3,662.50/oz • Ratio = 6,520 ÷ 3,662.50 ≈ 1.78


Caveat: The ratio is an indicator, not a compounding investment. It cannot be bought directly, does not include dividends, and serves best as a gauge of investor sentiment, risk preference, and macroeconomic regime.


Dow-to-Gold Ratio


Dow-to-Gold Ratio = (Dow Jones Industrial Average Level) ÷ (Gold Price in USD per oz)


The Dow-to-Gold Ratio is one of the oldest and most widely cited measures of how equities compare to gold. By dividing the level of the Dow Jones Industrial Average (DJIA) by the price of gold per ounce, the ratio captures long cycles of investor confidence, monetary regimes, and the shifting balance between paper wealth and tangible money. Because the DJIA dates back to the late 1800s and gold has been a benchmark for millennia, this ratio provides one of the deepest time series available for examining sentiment across centuries of market history.


For much of the early 20th century, gold's price was legally fixed, which constrained the denominator and meant the ratio moved almost entirely with the Dow. In the Great Depression, the Dow collapsed while gold was revalued from $20.67 to $35 per ounce under Roosevelt in 1934, which crushed the ratio. During the post–World War II boom, equities surged while gold remained pegged, causing the ratio to rise for decades, seemingly reflecting unstoppable U.S. economic dominance. Yet this was a distortion caused by the fixed peg — the true balance between stocks and gold was hidden until the 1970s.


The Nixon Shock of 1971 ended convertibility and allowed gold to float. The following decade's inflation and stagflation drove gold prices from $35 to over $800 per ounce, while the Dow stagnated. This collapsed the ratio to near 1 by 1980, meaning a single ounce of gold could "buy" the entire Dow index level. For perspective, the ratio had been in the 20–30 range for much of the mid-20th century, so the collapse represented a massive revaluation of tangible assets relative to equities.


The equity boom from 1982 through 2000 pushed the Dow-to-Gold Ratio to new heights. Disinflation, globalization, and technological expansion lifted the Dow by more than tenfold while gold slumped, sending the ratio above 40 at the dot-com bubble peak. The financial crisis of 2008 reversed this dynamic sharply: the Dow fell and gold rallied, compressing the ratio below 7 in 2011 as gold hit new highs near $1,900 per ounce. This dramatic swing again illustrated how crises shift investor preference back toward hard money.


In the 2010s and 2020s, the ratio has oscillated with cycles of stimulus, crisis, and inflation. Equities surged on monetary expansion after the crisis, lifting the ratio back into the 20s, but by 2025 gold's rally toward $3,662.50/oz combined with a still-strong Dow has compressed the ratio back toward the mid-teens. Like the S&P-to-Gold Ratio, the Dow-to-Gold is not an investable instrument, but an indicator of investor psychology and macroeconomic regime change. It reflects not compounding returns but relative preference between corporate paper wealth and tangible stores of value.


⸻


Key Details & Historical Anchors • Definition: (Dow Jones Industrial Average Level) ÷ (Gold Price in USD per oz). • Price index vs. total return: The Dow, like the S&P 500 price index, excludes dividends. A total-return adjusted version would show even stronger equity outperformance across the long term. • Splits & corporate actions: The DJIA is price-weighted, so stock splits and price changes mechanically alter weights. Methodology adjustments keep the index continuous. • Inflation lens: The raw ratio is nominal/nominal. A real lens requires CPI-adjusted Dow and gold.


Historical Anchors: • 1930s: Dow collapsed, gold revalued from $20.67 → $35, ratio compressed. • 1950s–1960s: Equities boomed, gold fixed; ratio steadily climbed into the 20s. • 1980: Ratio bottomed near 1 as stagflation crushed stocks and gold soared. • 2000: Ratio peaked above 40 at dot-com exuberance. • 2011: Ratio fell below 7 as gold neared $1,900/oz and the Dow stagnated. • 2025: Dow ≈ 45,448.28, gold ≈ $3,662.50/oz, ratio ≈ 12.41.


Price Performance Comparison: • Equities: From 1900–2024, the Dow (with dividends reinvested) compounded at ~9–10% nominal annually (~6–7% real). • Gold: From 1900–2024, gold compounded at ~4–5% nominal annually, mostly due to post-1971 free-float gains. • Cycles: Gold outperformed equities in the 1970s and 2000–2011; equities dominated over most other spans. • Purchasing power: A Dow share equivalent in 1900 vs. today reflects exponential wealth creation; gold mainly preserved purchasing power with bursts of extreme outperformance.


Interpretation Cheat-Sheet: • High ratio → equities expensive relative to gold (optimism, disinflation, booms). • Low ratio → gold expensive relative to equities (inflation, crisis, distrust in fiat). • Extremes (1 in 1980, 40+ in 2000) mark regime shifts.


Worked Example: • Dow = 45,448.28 • Gold = $3,662.50/oz • Ratio = 45,448.28 ÷ 3,662.50 ≈ 12.41


Caveat: The Dow-to-Gold Ratio is an indicator only. It cannot be invested in directly, does not account for dividends, and is best used as a long-term sentiment gauge of relative preference between equities and hard money.


Berkshire-to-Gold Ratio


Berkshire-to-Gold Ratio = (Price of One Berkshire Hathaway Share) ÷ (Gold Price in USD per oz)


The Berkshire-to-Gold Ratio compares the value of one share of Berkshire Hathaway, Warren Buffett's conglomerate, to the price of an ounce of gold. Unlike S&P-to-Gold or Dow-to-Gold, this ratio pits a single company against hard money, but Berkshire is unique: it has grown into a diversified empire spanning insurance, railroads, utilities, energy, consumer staples, manufacturing, retail, and a vast equity portfolio. Because its operations mirror so many sectors of the economy, Berkshire functions as a proxy for the broader U.S. economy itself, making this ratio an insightful measure of compounding enterprise versus inert monetary wealth.


Berkshire represents more than just a stock — it represents an economic model. Through its insurance subsidiaries and the float they generate, Buffett has created a permanent source of low-cost capital. That float, combined with disciplined acquisitions and reinvestment of all earnings, has compounded Berkshire's book value and intrinsic value for decades. Gold, by contrast, generates no cash flows and compounds only when its price rises. This fundamental difference in nature — one asset building wealth through productive use of capital, the other preserving value by scarcity — is what makes the Berkshire-to-Gold Ratio so striking.


Historically, Berkshire shares were modest relative to gold. In the 1960s and 1970s, a share equated to only a handful of ounces. But as Berkshire's collection of businesses grew and its compounding engine gained momentum, the ratio exploded upward. By the 2000s, one Class A share represented hundreds of ounces of gold, and by the 2010s–2020s it often exceeded 1,000 ounces. This surge illustrates Buffett's oft-repeated claim: productive assets, when allowed to reinvest and grow, leave static stores of value far behind.


Yet, the ratio is not a one-way street. During periods of crisis or inflation, gold can outperform even Berkshire. In the late 1970s, gold's historic surge pushed the ratio lower despite Berkshire's early growth. The 2008 financial crisis and the 2011 gold peak again compressed the ratio, as fear drove investors into hard money. In 2020, during the pandemic panic, gold briefly outpaced Berkshire, but the company's resilience and its breadth across the economy allowed it to rebound rapidly, restoring the ratio to elevated levels.


By 2025, Berkshire trades near $739,000 per Class A share, while gold sits above $3,662.50 per ounce, yielding a ratio of about 202 ounces per share. The broader lesson is not simply that gold preserves value and Berkshire compounds it. It is that Berkshire, as a stand-in for the U.S. economy's diverse productive base, demonstrates the multiplying effect of reinvested profits across industries. Gold remains a hedge and store of value; Berkshire reflects the dynamism of capitalism itself. Together, the ratio highlights the enduring tension between preservation and growth.


⸻


Key Details & Historical Anchors • Definition: (Price of One Berkshire Hathaway Share) ÷ (Gold Price in USD per oz). • Class A vs. Class B: Ratio typically cited using Class A. Class B can be scaled. • Dividends: Berkshire pays none — compounding comes entirely from reinvestment. • Splits/spinoffs/mergers: Berkshire has never split its Class A shares. Growth reflects reinvestment and acquisitions, not financial engineering. • Proxy for the economy: With operations in insurance, railroads, utilities, consumer goods, finance, and a massive equity portfolio, Berkshire tracks the performance of broad swathes of the U.S. economy.


Historical Anchors: • 1965: Berkshire ~$19, gold $35 → ratio ≈ 0.54 ounces/share. • 1980: Berkshire ~$300, gold ~$800 → ratio ≈ 0.38 ounces/share. • 2000: Berkshire ~$45,000, gold ~$280 → ratio ≈ 160 ounces/share. • 2011: Berkshire ~$120,000, gold ~$1,900 → ratio ≈ 63 ounces/share. • 2025: Berkshire ~$739,000, gold ~$3,662.50 → ratio ≈ 202 ounces/share.


Price Performance Comparison: • Berkshire Hathaway (1965–2024): Compounded ~19–20% annually during Buffett's tenure, far exceeding the S&P 500's ~10% average. • Gold (1971–2024): Compounded ~7–8% nominal annually (~3–4% real). • Relative wealth: Berkshire has multiplied wealth exponentially; gold has preserved purchasing power with episodic bursts of outperformance. • Purchasing power analogy: An ounce of gold buys roughly the same goods in 2025 as in 1971. One Berkshire share now buys a house.


Interpretation Cheat-Sheet: • High ratio → Berkshire (proxy for U.S. economy) outperforms gold; compounding dominates preservation. • Low ratio → gold temporarily outpaces even the strongest compounding vehicle, usually during crisis. • The long-run trajectory shows the economic power of reinvestment over static scarcity.


Worked Example: • Berkshire Hathaway Class A = $739,000 • Gold = $3,662.50/oz • Ratio = 739,000 ÷ 3,662.50 ≈ 202 ounces/share


Caveat: This ratio is an illustrative indicator, not investable directly. It emphasizes how a compounding, economy-spanning enterprise compares with a static store of value. The Berkshire-to-Gold Ratio is best understood as a vivid proxy for the contrast between the U.S. economy's productive dynamism and gold's timeless role as preserved wealth.


Apple-to-Gold Ratio — Innovation vs. Monetary Preservation


Introduction & Concept


The Apple-to-Gold ratio measures how many ounces of gold one share of Apple (AAPL) can buy. Like the Dow-to-Gold ratio, it shows the relative performance of a leading equity against a timeless monetary store of value. When the ratio rises, Apple is compounding faster than gold. When it falls, gold is outperforming Apple (usually during crises or periods of tech weakness).


Founding & Early Ratio (1980 IPO)


Apple went public in December 1980 at $22/share. Gold at the time traded near $620/oz during the post-inflation peak. That means: • Apple-to-Gold ratio (1980): 0.035 oz/share (≈ 1 share = 0.035 ounces of gold). • Put another way: it took about 28 Apple shares to equal 1 ounce of gold.


Long-Run Ratio Performance • 1990s Apple struggles: As Apple fell toward bankruptcy, the ratio collapsed — gold held steady, Apple lost value. In 1997, AAPL traded near $0.30/share (split-adjusted) while gold was ~$330/oz. The ratio bottomed at 0.001 oz/share. • 2000s iPod/iPhone boom: Apple surged, ratio soared. By 2007, AAPL was ~$12/share vs. gold ~$650/oz = 0.018 oz/share. • 2008–2009 crisis: Apple stock crashed over 50% while gold rallied. Ratio dropped sharply. • 2010s dominance: Apple exploded upward. By 2012, AAPL ~$90/share vs. gold ~$1,600/oz = 0.056 oz/share. By 2020, AAPL ~$125/share vs. gold ~$1,900/oz = 0.066 oz/share. • 2025 today: Apple ~$234.35/share vs. gold ~$3,662.50/oz = 0.064 oz/share (1 share = 1/16 of an ounce of gold).


Cycles & Interpretation • 1980s–1990s: Ratio flat-to-down, gold held value while Apple nearly collapsed. • 2000s: Apple rebirth → ratio breaks out. • 2008–2009: Crisis → ratio drops (gold hedge worked, Apple equity sold off). • 2010s: Apple supremacy → ratio soars again. • 2020s: Both strong, ratio stable around 0.06 oz/share.


Closing Lesson


The Apple-to-Gold ratio illustrates the duality of innovation vs. preservation. Gold preserved value across crises, but Apple — once it survived its near-death — vastly outperformed. From IPO to today, Apple rose from 0.035 oz/share to ~0.064 oz/share — nearly a 2x gain in gold terms despite gold's own powerful run. The lesson: gold preserved, Apple compounded.


⸻


Expanded Bullet Breakdown


Apple-to-Gold Ratio at Key Points • 1980 IPO: 0.035 oz/share (1 share = 1/28 oz gold). • 1997 near bankruptcy: 0.001 oz/share (1 share = 1/1,000 oz gold). • 2007 pre-iPhone boom: 0.018 oz/share. • 2012 (post-iPhone surge): 0.056 oz/share. • 2020 (COVID + inflation): 0.066 oz/share. • 2025: 0.064 oz/share.


Worked Example ($100 in Apple vs. Gold, 1980) • $100 in Apple at IPO = ~4.5 shares = 0.16 oz gold equivalent. • Today: 4.5 shares × 0.064 oz/share = 0.29 oz gold equivalent. • Gold itself rose from 0.16 oz to 0.58 oz on $100. • Apple in gold terms: outperformed 1980–1997, underperformed 1997, massively outperformed post-2000, stable today.


Gold-to-Silver Ratio


Gold-to-Silver Ratio = (Gold Price in USD per oz) ÷ (Silver Price in USD per oz)


The Gold-to-Silver Ratio is one of the oldest monetary relationships in history, measuring how many ounces of silver equal the value of one ounce of gold. Both metals have served as money for thousands of years, but because gold is rarer and denser while silver is more abundant and practical for coinage, their relative values have shifted with time, policy, and market forces. More than any other ratio, gold-to-silver reveals the interplay between scarcity, utility, and political control over money.


In the Roman Empire, the ratio generally floated around 12:1, a level that reflected both natural availability and imperial decree. This convention was so stable that it influenced centuries of trade across Europe and the Mediterranean. Medieval monarchies and kingdoms often held the ratio in a similar band of 10–15:1, with fluctuations driven by mining discoveries, warfare, and monetary reforms. France played a crucial role in fixing the ratio during the 18th and 19th centuries: the French "bimetallic standard" of 15.5:1 (established under Napoleon) became a de facto anchor for Europe, with the Latin Monetary Union later adopting similar terms. These official ratios often produced distortions: when the legal ratio diverged from market value, the undervalued metal vanished from circulation, a dynamic known as Gresham's Law.


The United States likewise experimented with bimetallism. The Coinage Act of 1792 fixed the ratio at 15:1, reflecting international norms. But as global supplies and market forces shifted, silver often became undervalued or overvalued at that rate, leading to imbalances. Eventually, by the late 19th century, most nations abandoned silver as a monetary base. Gold became the dominant reserve asset under the classical gold standard, while silver's role declined. As a result, the gold-to-silver ratio drifted higher, typically into the 30–40 range, reflecting silver's diminished monetary role and growing use in industrial applications.


A crucial reason the ratio evolved in this direction is that silver, unlike gold, is typically mined as a byproduct of other metals. Roughly three-quarters of annual silver supply comes from copper, lead, and zinc mining, not from silver-dedicated mines. This means silver supply expands and contracts with industrial demand for base metals rather than with monetary demand for silver itself. Gold supply, by contrast, is steadier because it is mined deliberately and primarily for its monetary and investment role. This structural difference is why gold retains its relative scarcity and monetary status, while silver's supply dynamics inject more volatility into the ratio.


In the 20th century, silver was formally demonetized across much of the world, cementing gold as the anchor of central-bank reserves. The ratio often ranged between 40 and 60 for decades, but it became more volatile after both metals were freed to float in the 1970s. The 1980 Hunt brothers' silver cornering attempt drove silver near $50/oz while gold hit $850, compressing the ratio to 17:1, the lowest modern reading. In the decades that followed, silver generally lagged gold, and the ratio expanded again into the 60–80 range.


Recent decades have shown the ratio as a barometer of relative investor appetite for precious metals. In 2011, silver surged to $49/oz as gold peaked near $1,900/oz, compressing the ratio to 38:1. In contrast, during the 2020 pandemic panic, silver collapsed relative to gold, briefly pushing the ratio above 120:1, the highest in recorded history. By 2025, gold above $3,662.50 and silver around $41.40 place the ratio near 88.5:1. This shows how gold has retained its role as the premier monetary hedge, while silver's dual role — part monetary, part industrial, and tied to byproduct supply — leaves it more volatile.


⸻


Key Details & Historical Anchors • Definition: (Gold Price per oz) ÷ (Silver Price per oz). • Historical roots: Used for thousands of years in coinage and trade. • Policy anchors: • Rome: ~12:1 ratio. • Medieval Europe: 10–15:1 common. • France (Napoleonic era): 15.5:1 became standard in Europe. • U.S. Coinage Act of 1792: 15:1 fixed ratio. • Bimetallism distortions: Legal ratios often diverged from market, causing one metal to vanish (Gresham's Law). • Demonetization: 19th–20th centuries saw silver lose status as reserve money, pushing ratio higher. • Byproduct nature: About 70–80% of silver comes from copper, lead, and zinc mining. Supply is tied to industrial cycles, unlike gold's steady, deliberate supply.


Historical Anchors: • Roman Empire: ~12:1. • Napoleonic France: fixed 15.5:1. • U.S. Coinage Act 1792: fixed 15:1. • 1930s: ratio floated ~50–60 as silver weakened. • 1980: gold $850, silver $50 → ratio ~17:1. • 2011: gold $1,900, silver $49 → ratio ~38:1. • 2020: gold $2,050, silver $12 → ratio ~120:1 (record high). • 2025: gold $3,662.50, silver $41.40 → ratio ≈ 88.5:1.


Price Performance Comparison: • Gold (1971–2024): ~7–8% nominal annualized (~3–4% real). • Silver (1971–2024): ~6–7% nominal annualized (~2–3% real). Higher volatility and longer flat stretches than gold. • Cycles: Silver outperforms in speculative surges (1980, 2011), but underperforms during crises or industrial weakness (1990s, 2020).


Interpretation Cheat-Sheet: • Low ratio → silver strong relative to gold (speculative booms, industrial optimism). • High ratio → gold strong relative to silver (crises, safe-haven demand, weak industrial cycle). • Extremes (sub-20 or over-100) typically mark turning points.


Worked Example: • Gold = $3,662.50/oz • Silver = $41.40/oz • Ratio = 3,662.50 ÷ 41.40 ≈ 88.5


Caveat: The gold-to-silver ratio is an indicator, not an investable product. It reflects relative valuation between two monetary metals and investor psychology. Over centuries, gold has been more stable, while silver delivers higher volatility and leverage to precious metals cycles, in part because of its byproduct nature.


Oil-to-Gold Ratio


Oil-to-Gold Ratio = (Price of One Barrel of Crude Oil in USD) ÷ (Gold Price in USD per oz)


The Oil-to-Gold Ratio compares the price of crude oil to the price of gold, showing how many barrels of oil can be purchased with one ounce of gold. This ratio is important because it links the world's premier industrial commodity (oil) with its premier monetary commodity (gold). Oil represents energy and industrial demand, while gold represents money and financial sentiment. Tracking their relationship reveals not only inflationary and deflationary cycles but also the interplay between physical resource scarcity and financial confidence.


Historically, the ratio has averaged around 15–20 barrels of oil per ounce of gold, though it has swung widely. In the 1950s and 1960s, during the Bretton Woods era, the ratio was fairly stable because both gold and oil were priced administratively — gold at $35/oz and oil around $2–3 per barrel. This stability ended in the 1970s when the gold peg was abandoned and OPEC asserted pricing power, triggering extreme volatility in both assets. The combination of dollar devaluation, inflation, and the oil shocks of 1973 and 1979 caused the ratio to compress sharply, reflecting simultaneous surges in both commodities but with oil rising even faster at times.


By 1980, gold's spike to $850/oz and oil's climb toward $40/barrel left the ratio around 20:1, in line with long-run averages. But subsequent decades saw cycles of divergence. In the 1980s and 1990s, falling oil prices (thanks to new supply and weaker demand) contrasted with steady gold prices, expanding the ratio toward 30–40:1. In the 2000s commodity supercycle, oil surged from $20 to over $140/barrel while gold rose from $300 to $1,000/oz, compressing the ratio to near 7:1 in 2008 — its lowest level in modern history.


The global financial crisis and the shale oil revolution reshaped the ratio again. After 2008, oil prices fell while gold surged, pushing the ratio back above 20:1. During the 2011 gold peak, one ounce of gold bought over 30 barrels of oil. The 2014–2016 oil price collapse, when crude briefly dipped below $30, drove the ratio to extreme highs above 40:1. The 2020 pandemic shock pushed the ratio even further: oil briefly traded negative in April 2020 while gold approached $2,000/oz, temporarily sending the ratio to an absurd reading (effectively infinite).


By 2025, with Brent crude around $67.58 per barrel and gold above $3,662.50/oz, the ratio sits near 0.018 barrels per ounce (or inversely ~54:1 ounces per barrel), well above its historical average. This reflects both structural shifts in energy markets — abundant shale supply, OPEC+ dynamics, and the energy transition — and gold's renewed role as a financial hedge amid inflation and geopolitical risk. The oil-to-gold ratio, like the others, is not an investment itself, but an indicator of the balance between physical energy wealth and financial safe-haven demand.


⸻


Key Details & Historical Anchors • Definition: (Oil Price per barrel in USD) ÷ (Gold Price per oz in USD). • Benchmarks: Typically uses Brent or WTI crude. Long-term historical series often use average world oil prices. • Historical average: ~15–20 barrels per ounce of gold. • Drivers: • Oil → demand/supply cycles, OPEC policy, geopolitics, industrial growth. • Gold → inflation, real interest rates, financial stress, safe-haven demand.


Historical Anchors: • 1960s: gold $35, oil ~$3 → ratio ~12. • 1980: gold $850, oil $40 → ratio ~21. • 2008: gold $1,000, oil $140 → ratio ~7 (modern low). • 2011: gold $1,900, oil $100 → ratio ~19. • 2016: gold $1,200, oil $30 → ratio ~40. • 2020: oil briefly negative, gold $2,000 → ratio effectively infinite. • 2025: gold $3,662.50, oil $67.58 → ratio ≈ 0.018 (inversely ~54:1).


Price Performance Comparison: • Gold (1971–2024): ~7–8% nominal annualized (~3–4% real). • Oil (1971–2024): Nominal gains ~6–7% annualized but extremely volatile; long stretches of flat or negative real returns. • Wealth preservation: Gold compounds slowly; oil offers bursts of performance but is cyclical and consumable, not a store of wealth.


Interpretation Cheat-Sheet: • Low ratio → oil expensive relative to gold (commodity booms, supply shocks, inflationary energy crises). • High ratio → gold expensive relative to oil (energy abundance, weak demand, or financial stress pushing gold higher). • Extremes often mark turning points (2008 oil boom, 2020 pandemic crash).


Worked Example: • Oil = $67.58/barrel • Gold = $3,662.50/oz • Ratio = 67.58 ÷ 3,662.50 ≈ 0.018 barrels per ounce → ~54:1


Caveat: The oil-to-gold ratio is an indicator only. Oil is consumed, perishable, and tied to industrial cycles, while gold is hoarded and monetary. This ratio shows their shifting relative importance, but it cannot be invested in directly.


Lumber-to-Gold Ratio


Lumber-to-Gold Ratio = (Price of Lumber in USD per board foot) ÷ (Gold Price in USD per oz)


The Lumber-to-Gold Ratio is a lesser-known but insightful indicator that compares the price of lumber, a cyclical industrial commodity, to the price of gold, a defensive monetary asset. It measures how many ounces of gold are required to buy a unit of lumber (often standardized per 1,000 board feet). Unlike ratios that compare financial assets with gold, this one directly contrasts "growth" with "fear": when lumber is strong relative to gold, it usually signals economic expansion, housing demand, and investor confidence. When lumber is weak and gold is strong, it often reflects economic slowdown, inflation stress, or a flight to safety.


What makes this ratio particularly interesting is the contrast of symbolism. Gold is generally associated with wealth preservation and crisis hedging, while lumber is tied to building, construction, consumption, and growth. Together, they form a kind of microcosm of the economy: preservation versus expansion, fear versus optimism. Watching how the ratio shifts between these poles provides a simple but powerful way of interpreting market psychology.


Historically, the lumber-to-gold ratio has tracked cycles in housing and construction. Lumber prices are closely tied to building activity, mortgage markets, and consumer demand, making them one of the most sensitive economic barometers. In the 20th century, this ratio tended to rise during booms — such as the postwar housing surge in the 1950s and the housing bubble of the early 2000s — and to fall during recessions when construction activity stalled. Gold, meanwhile, tends to rise during financial stress, making the ratio a two-sided indicator of sentiment.


One of the most striking episodes came during the 2008 financial crisis and subsequent housing collapse. Lumber prices plunged while gold surged, compressing the ratio dramatically and signaling the depth of economic distress. The early 2010s saw the ratio recover gradually as housing rebounded and construction stabilized, though it remained volatile. Analysts often note that sustained weakness in the lumber-to-gold ratio has preceded or accompanied recessions, while strength has tended to align with recoveries.


In the 2020 pandemic, the ratio demonstrated its volatility. Lumber initially collapsed as construction slowed, while gold spiked on panic, driving the ratio to lows not seen in decades. But as stimulus and low interest rates reignited housing demand, lumber prices exploded upward, reaching record levels in 2021. At the peak, lumber over $1,600 per 1,000 board feet versus gold around $1,800/oz pushed the ratio briefly above 0.9, its highest in modern history. This surge was unsustainable; supply chain normalization and interest rate hikes later crushed lumber prices, pulling the ratio back down.


By 2025, lumber has stabilized near $522 per 1,000 board feet, while gold has surged past $3,662.50/oz, yielding a ratio of about 0.14. This low level reflects both the extraordinary strength of gold and the cooling of construction amid tighter monetary policy. The lumber-to-gold ratio, while less famous than others, remains a powerful gauge: it condenses the tension between real-economy growth (lumber demand) and financial caution (gold buying) into one number.


⸻


Key Details & Historical Anchors • Definition: (Price of Lumber per 1,000 board feet in USD) ÷ (Gold Price per oz in USD). • Nature of assets: • Lumber = cyclical, perishable, industrial commodity tied to housing. • Gold = durable, monetary commodity tied to safe-haven demand. • Interpretation: High ratio = growth optimism; Low ratio = caution/fear.


Historical Anchors: • 1950s: Postwar housing boom lifted lumber relative to gold. • 1970s: Inflation pushed gold sharply higher, compressing the ratio. • 2000s: Housing bubble lifted lumber; ratio peaked before 2008 collapse. • 2008: Lumber crash + gold spike → ratio at multi-decade lows. • 2021: Lumber $1,600, gold $1,800 → ratio ≈ 0.9 (record modern high). • 2025: Lumber $522, gold $3,662.50 → ratio ≈ 0.14.


Price Performance Comparison: • Lumber (1970–2024): Volatile, tied to housing and supply cycles. Long-run nominal returns ~3–4% annually, often lagging inflation. • Gold (1971–2024): ~7–8% nominal annualized (~3–4% real). More consistent store of value than lumber. • Cycles: Lumber outperforms in housing booms; gold outperforms in inflationary or crisis periods.


Interpretation Cheat-Sheet: • High ratio → housing demand strong, investors confident in growth. • Low ratio → economic stress, inflation, or safe-haven preference dominates. • Turning points in the ratio often align with recessions or recoveries.


Worked Example: • Lumber = $522 per 1,000 board feet • Gold = $3,662.50/oz • Ratio = 522 ÷ 3,662.50 ≈ 0.143 → ~0.14


Caveat: The lumber-to-gold ratio is an indicator only. Lumber is consumable and cyclical, not a store of wealth. Gold is durable and monetary. Their ratio cannot be invested in directly, but it remains a useful barometer of whether markets are leaning toward growth or caution — a small but telling microcosm of the economy itself.


GLD vs. SPY


GLD vs. SPY = Performance of SPDR Gold Shares ETF compared to SPDR S&P 500 ETF Trust


The comparison between GLD and SPY is a modern extension of the classic stock-to-gold debate. GLD, launched in 2004, is the largest gold-backed exchange-traded fund, designed to track the spot price of gold by holding bullion in trust. SPY, launched in 1993, is the oldest and largest ETF tracking the S&P 500 Index. Together, these two funds pit the premier monetary hedge against the premier equity benchmark in a form that is easily investable and directly comparable. Unlike abstract ratios, GLD vs. SPY is accessible to any investor in ETF form.


GLD is backed by physical gold stored in vaults, typically in London, with shares representing fractional claims on that bullion (minus management fees of 0.40% annually). It provides exposure to gold's price movements without the logistical challenges of owning and storing physical bullion. SPY, in contrast, holds the 500 largest U.S. companies by market capitalization, distributing dividends and reflecting the compounding power of corporate earnings. The structural difference is critical: GLD preserves wealth in a non-yielding asset, while SPY compounds wealth through growth and reinvested dividends.


Since GLD's inception in 2004, the performance comparison has oscillated. In the 2008 financial crisis, GLD outperformed dramatically as investors sought safety, while SPY plunged. Between 2004 and 2011, GLD gained over 250%, while SPY returned just 15%. But in the decade following, SPY roared back with one of the strongest bull markets in history, delivering over 300% returns from 2011 to 2021, while GLD stagnated. These cycles mirror the long-term stock-to-gold ratios: gold surges in crises, stocks dominate in expansions.


The 2020 pandemic created another inflection point. GLD spiked nearly 30% in the first year as gold surged past $2,000/oz, while SPY initially fell but then recovered strongly on fiscal and monetary stimulus. By 2021, SPY had resumed its dominance, compounding through earnings growth and dividends, while GLD leveled off. By 2025, with gold at record highs near $3,662.50 and the S&P 500 also setting records around 6,520, both ETFs have delivered strong returns — but SPY's compounding and dividend reinvestment still provide a long-term edge.


Ultimately, GLD vs. SPY is not about declaring one "better" than the other but understanding their roles. GLD functions as a hedge, a store of value, and an anchor in crisis. SPY functions as a compounding engine for long-term wealth tied to the U.S. economy. When viewed together, they embody two sides of portfolio construction: protection and growth. The choice is not binary — many institutional investors hold both, recognizing the ratio between them as a sentiment gauge and as a practical tool for diversification.


⸻


Key Details & Historical Anchors • Definition: GLD = SPDR Gold Shares ETF (tracks gold bullion). SPY = SPDR S&P 500 ETF Trust (tracks S&P 500 Index). • Launch dates: SPY in 1993; GLD in 2004. • Structure: • GLD backed by physical bullion in vaults, expense ratio ~0.40%. • SPY holds equities, distributes dividends, expense ratio ~0.09%. • Core difference: GLD = preservation; SPY = compounding.


Historical Anchors (Performance Since GLD's Launch): • 2004–2011: GLD +250%; SPY +15%. • 2011–2021: SPY +300%; GLD flat. • 2020: GLD +30% (safe-haven surge); SPY fell, then recovered strongly. • 2025: GLD up sharply with gold >$3,662.50/oz; SPY at record highs ~6,520.


10-Year Comparison (2015–2025): • SPY: ≈ +200% total return (~11–12% annualized with dividends). • GLD: ≈ +70–80% (~5–6% annualized). • Takeaway: SPY outpaced GLD nearly 3-to-1, though GLD provided diversification and hedged shocks.


20-Year Comparison (2005–2025): • SPY: ≈ +450% total return (~8–9% annualized). • Gold/GLD proxy: ≈ +320% (~7% annualized). • Takeaway: Over two decades, equities compounded faster, but gold delivered meaningful real returns and strong protection during crises.


30-Year Comparison (1995–2025): • SPY: ≈ +1,400% total return (~9–10% annualized). • Gold (spot): ≈ +530% (~6% annualized). • Takeaway: Equities built far more wealth over three decades, but gold still preserved purchasing power and cushioned volatility.


Price Performance Comparison: • SPY (1993–2024): ~9–10% annualized nominal returns with dividends (~6–7% real). • GLD (2004–2024): ~7–8% nominal annualized (~3–4% real). • Wealth compounding: SPY reinvests dividends and benefits from economic growth; GLD tracks gold, which does not compound. • Cycle pattern: GLD leads in crises; SPY leads in recoveries and long expansions.


Interpretation Cheat-Sheet: • GLD outperformance → crisis, inflation, distrust in fiat, risk-off sentiment. • SPY outperformance → growth, confidence, corporate earnings strength. • Long-term → SPY compounds more wealth, GLD preserves it.


Worked Example (2025): • GLD = ~$336/share (tracking gold $3,662.50/oz). • SPY = ~$652/share (tracking S&P 500 at 6,520). • Relative valuation = SPY/GLD ≈ 1.94.


Caveat: GLD vs. SPY is an investable comparison unlike abstract ratios, but it is still an indicator of sentiment. GLD is a store of value, not a compounding vehicle; SPY compounds wealth but suffers in crises. Together, they illustrate the dual needs of protection and growth in a balanced portfolio.


QQQ vs. GLD


QQQ vs. GLD = Performance of Invesco QQQ Trust compared to SPDR Gold Shares ETF


The QQQ vs. GLD comparison highlights the tension between two radically different investment vehicles: technology-driven equity growth and gold-backed wealth preservation. QQQ, launched in 1999, tracks the Nasdaq-100 Index, which is dominated by large-cap technology and growth companies such as Apple, Microsoft, Amazon, and Nvidia. GLD, launched in 2004, holds physical gold bullion in trust and mirrors gold's price. Together, they pit one of the most growth-oriented asset classes against one of the oldest safe-haven assets, offering a stark contrast in risk, reward, and investor psychology.


QQQ represents concentrated exposure to the innovation economy. It reflects corporate earnings, technological disruption, and investor confidence in growth narratives. When technology thrives, QQQ compounds wealth rapidly, fueled by both price appreciation and reinvested dividends. GLD, by contrast, generates no cash flow; it tracks gold's spot price and preserves purchasing power across decades. In this sense, QQQ is an engine of growth, while GLD is a vessel of stability. The ratio between them captures the cycle of optimism versus caution that defines modern markets.


Since GLD's inception in 2004, QQQ has outperformed dramatically over the long term, but not without periods of reversal. During the global financial crisis of 2008, GLD surged while QQQ fell sharply, briefly giving gold the upper hand. From 2009 through 2021, however, QQQ staged one of the greatest runs in history, returning more than 900% as technology stocks dominated the global economy. GLD rose during inflationary and crisis moments, but its cumulative return of ~150% over the same period lagged far behind QQQ's compounding.


The 2020 pandemic offered a telling microcosm. Both assets surged, but for different reasons: GLD as a hedge against monetary stimulus and panic, and QQQ as a bet on digital transformation and work-from-home acceleration. For a time, their parallel gains showed how investors can seek both growth and safety simultaneously. However, as inflation accelerated in 2021–2022, gold outperformed briefly, before QQQ regained strength with the AI-driven rally of 2023–2025. By 2025, QQQ reached record highs near $582/share, while GLD, supported by gold at $3,662.50/oz, trades around $336/share.


Ultimately, QQQ vs. GLD is not just a performance comparison; it is a reflection of two competing philosophies of wealth. QQQ embodies faith in innovation, productivity, and compounding through corporate growth. GLD embodies caution, preservation, and insurance against the excesses of that same system. The two are less rivals than complements: in a diversified portfolio, they balance each other — growth and defense, risk and hedge, future and permanence.


⸻


Key Details & Historical Anchors • Definition: QQQ = Invesco QQQ Trust (tracks Nasdaq-100). GLD = SPDR Gold Shares ETF (tracks bullion). • Launch dates: QQQ in 1999; GLD in 2004. • Structure: • QQQ = equities (tech-heavy, growth-driven, dividends reinvested). • GLD = physical bullion (0.40% annual fee, no dividends). • Core difference: QQQ compounds; GLD preserves.


Historical Anchors (Performance Since GLD's Launch): • 2004–2008: GLD outperformed in crisis; QQQ lagged. • 2009–2021: QQQ +900%; GLD +150%. • 2020 pandemic: both surged; GLD on panic, QQQ on tech acceleration. • 2022 inflation: gold outperformed briefly, then QQQ rebounded. • 2025: QQQ ~$582, GLD ~$336.


10-Year Comparison (2015–2025): • QQQ: ≈ +450% total return (~16% annualized). • GLD: ≈ +70–80% (~5–6% annualized). • Takeaway: Tech-driven compounding overwhelmed gold's preservation, but GLD cushioned volatility in stress years.


20-Year Comparison (2005–2025): • QQQ: ≈ +1,100% total return (~13–14% annualized). • Gold/GLD proxy: ≈ +320% (~7% annualized). • Takeaway: Equities outperformed severalfold, but gold held real value and spiked in crises.


30-Year Comparison (1995–2025): • QQQ (Nasdaq-100 proxy): ≈ +2,000% total return (~14% annualized). • Gold (spot): ≈ +530% (~6% annualized). • Takeaway: Tech dominance dwarfed gold's returns, though gold still preserved purchasing power across decades.


Price Performance Comparison: • QQQ (1999–2024): ~11–12% annualized (dividends reinvested). • GLD (2004–2024): ~7–8% annualized (tracks gold spot). • Cycle pattern: GLD surges in crises; QQQ surges in growth booms.


Interpretation Cheat-Sheet: • GLD outperformance → crisis, inflation, financial distrust. • QQQ outperformance → tech growth, productivity, risk appetite. • Long-term → QQQ compounds far more wealth, GLD hedges it.


Worked Example (2025): • QQQ = $582/share • GLD = $336/share • Relative valuation = QQQ/GLD ≈ 1.73.


Caveat: QQQ vs. GLD is an investable comparison, but it is not about which "wins" universally. QQQ compounds wealth but is volatile; GLD preserves value but does not compound. Used together, they represent one of the clearest modern expressions of growth versus preservation.


Wheat-to-Gold Ratio


Wheat-to-Gold Ratio = (Price of Wheat per bushel in USD) ÷ (Gold Price in USD per oz)


The Wheat-to-Gold Ratio compares a staple food commodity to gold, showing how many bushels one ounce of gold buys. It's a long-run yardstick for purchasing power because gold is monetary and durable while wheat is consumable and cyclical. Over centuries this ratio has moved with monetary regimes, agricultural productivity, and food-supply shocks, making it a useful (if rough) lens on subsistence purchasing power.


In the 19th and early 20th centuries—when the U.S. official gold price was $20.67/oz (raised to $35/oz in 1934)—wheat farm prices generally ran around $0.80–$1.20/bu (1900–1930) and $1.80–$2.50/bu (1950s–1960s), implying ~17–26 bushels/oz pre-1933 and roughly ~14–19 bushels/oz in the Bretton Woods era. That's far lower than the "hundreds of bushels" claim and reflects the reality that both gold and wheat were relatively "administered" in these periods (gold fixed by statute; wheat influenced by farm policies and yields).


After 1971, when dollar convertibility ended and gold floated, the ratio became more volatile. Wheat price spikes in the 1970s compressed the ratio, while later productivity gains and policy shifts sometimes expanded it. The 2007–08 food-price crisis drove international wheat prices above $10/bu (with some U.S. contracts spiking higher), compressing the ratio even as gold rose toward $1,000/oz.


In 2011–2012, drought conditions tightened supply and wheat traded near $9/bu at points, but with gold around $1,700/oz the ratio still sat near ~190 bushels/oz, consistent with gold's strong purchasing power even amid elevated food prices.


As of 2025, spot gold has pushed to record highs above $3,662.50/oz, while benchmark wheat has cooled back near $4.97/bu (varies by contract/grade), placing the ratio around ~737 bushels/oz (e.g., $3,662.50 ÷ $4.97 ≈ 737). This historically high reading reflects both strong monetary demand for gold and ample global wheat supply relative to crisis peaks.


⸻


Key Details & Historical Anchors • Definition: (Wheat $/bu) ÷ (Gold $/oz). • Monetary regimes: U.S. official gold price $20.67/oz prior to 1933; $35/oz after the 1934 Gold Reserve Act; gold free-floated after 1971.


• Typical historical ranges (illustrative): • 1900–1930: wheat ~$0.80–$1.20 → ~17–26 bu/oz (gold $20.67).


• 1950s–1960s: wheat ~$1.8–$2.5 → ~14–19 bu/oz (gold $35).


• 2007–08: wheat >$10 (peaks) vs. gold near $1,000 → ~100 bu/oz.


• 2012: wheat ~$9 vs. gold ~$1,700 → ~190 bu/oz.


• 2025: wheat ~$4.97 vs. gold ~$3,662.50 → ~737 bu/oz.


Price Performance Comparison: • Wheat (1970s–2020s): Highly volatile; long-run nominal returns modest and often below CPI; spikes tied to weather, policy, energy, and trade shocks. (USDA ERS/NASS long series.)


• Gold (post-1971): Positive real performance over multi-decade windows; strongly responsive to real rates, policy credibility, and central-bank demand. (Fed history; Reuters 2025 records.)


Interpretation Cheat-Sheet: • Low ratio → wheat expensive relative to gold (food scarcity, supply shocks). • High ratio → wheat cheap relative to gold (ample crops; strong monetary demand for gold).


Worked Example (2025): • Wheat = $4.97/bu; Gold = $3,662.50/oz → ~737 bu/oz.


Caveat: This is an indicator, not an investable product. Local basis/grade differences, subsidies, and storage/transport costs mean the "bushels per ounce" reading is a macro signal, not a literal grocery bill.


Housing-to-Gold Ratio


Housing-to-Gold Ratio = (Median Home Price in USD) ÷ (Gold Price in USD per oz)


The Housing-to-Gold Ratio asks a simple but powerful question: how many ounces of gold does it take to buy the median U.S. home? Housing is a leveraged, income-linked real asset, while gold is a non-yielding monetary store of value. Their ratio compresses and expands with credit cycles, real interest rates, and inflation. A high ratio means homes are expensive in gold terms (credit easy, gold weak); a low ratio means homes are cheaper in gold terms (credit tight, gold strong).


In the 1970s inflation shock, both housing and gold rose, but gold's surge dominated. By January 1980, gold peaked at $850/oz, while the median new home cost roughly $64,600, making a house worth only ~76 ounces of gold — one of the lowest readings in modern history. In contrast, by 2000, gold languished near $280/oz while the median home cost around $165,300, pushing the ratio above 590 ounces — homes historically expensive in gold terms.


The 2000s housing bubble widened the ratio further until the 2008 crisis. From 2008 to 2011, gold spiked to nearly $1,900/oz, while homes slipped toward $220,000, compressing the ratio to about 115 ounces — the cheapest homes in gold terms since 1980. In the 2010s, falling mortgage rates boosted real estate while gold cooled, pushing the ratio upward again.


In the 2020s, pandemic-era stimulus and supply shortages lifted home prices, but gold also rallied on inflation and geopolitical risk. By mid-2025, the median existing-home price was $410,800 (Census Q2 2025), while with gold at $3,662.50/oz, the ratio stands around 112 ounces per home. This level shows that while U.S. housing is expensive in dollars, in gold terms it is near long-term lows — reflecting the strength of gold's monetary demand.


It's important to note this ratio is an indicator, not a transaction tool. Housing involves financing, maintenance, taxes, and geographic dispersion, while gold has no yield but low carrying costs (0.40% annually via GLD). Used properly, the ratio illustrates credit and inflation regimes rather than suggesting a literal exchange rate between bricks and bullion.


⸻


Key Details & Historical Anchors • Definition: Median home price ÷ gold price per ounce. • Anchors: • 1980: $64,600 ÷ $850 → ~76 oz/home. • 2000: $165,300 ÷ $280 → ~590 oz/home. • 2011: ~$220,000 ÷ $1,900 → ~115 oz/home. • 2025: $410,800 ÷ $3,662.50 → ~112 oz/home.


Price Performance Comparison: • Homes: Long-run appreciation ~4–5% annually, plus rental yield. • Gold: ~7–8% annualized since 1971, ~3–4% real. • Cycle: Homes outperform in credit booms; gold outperforms in crises.


Interpretation Cheat-Sheet: • Low ratio → gold strong, homes "cheap" in gold (1980, 2011, 2025). • High ratio → gold weak, homes "expensive" in gold (2000, mid-2000s).


Worked Example (2025): • Median existing home = $410,800 • Gold = $3,662.50/oz • Ratio = 410,800 ÷ 3,662.50 ≈ 112 oz/home


Caveat: Ignores interest rates, local markets, and rent value. Best used as a macro signal of purchasing power and credit cycles.


Wages-to-Gold Ratio


Wages-to-Gold Ratio = (Median Hourly Wage in USD) ÷ (Gold Price per oz in USD)


The Wages-to-Gold Ratio measures how many hours of work at the median U.S. wage it takes to purchase one ounce of gold. This is one of the clearest ways to gauge gold's purchasing power in terms of human labor. Unlike housing or wheat, which reflect goods, wages connect gold directly to work and income — the foundation of living standards. A low ratio (fewer hours per ounce) means gold is relatively cheap in labor terms; a high ratio means gold is expensive relative to wages.


In the decades before 1971, gold was fixed at $35/oz under Bretton Woods. Median hourly wages in 1970 were around $3.38/hour (BLS series, adjusted for private nonfarm workers). That meant one ounce of gold cost roughly 10 hours of work — just over a day's wages. After the gold peg ended in 1971, gold floated freely and surged during the inflationary 1970s. By 1980, with gold at $850/oz and wages at about $6.86/hour, it required over 124 hours (three weeks of work) to buy one ounce. This was the highest "labor cost" of gold in modern U.S. history.


The following two decades saw the ratio fall. In the 1990s, gold was subdued (averaging $300–$400/oz) while wages climbed into the $11–$14/hour range. By 2000, with gold ~$280/oz and wages ~$14/hour, one ounce required just 20 hours of work — less than three days' wages. This was the cheapest gold had been in wage terms since the end of the gold standard.


The 2000s reversed the pattern. As gold rose during the commodity supercycle and financial crisis, the ratio expanded again. In 2011, gold peaked near $1,900/oz, while wages averaged ~$20/hour, requiring 95 hours of work to buy one ounce. By contrast, in the 2010s, gold softened while wages kept climbing, compressing the ratio into the 60–70 hour range.


By 2025, with gold near $3,662.50/oz and median hourly wages around $31.46/hour (BLS, August 2025), it takes roughly 116 hours of work — about three weeks — to buy a single ounce of gold. This places the ratio near its historical highs, similar to 1980, highlighting both gold's surge as a monetary hedge and the fact that wage growth has lagged inflation-adjusted asset appreciation.


⸻


The Roman Centurion Analogy


One of the most famous anecdotes used to describe gold's "timeless" purchasing power is the Roman Centurion study. Ancient records suggest that a legionary centurion in the Roman Empire might earn around 2,500 denarii per year, and historians estimate that one pound of gold (~12 ounces) was worth about the same amount. That implies that an ounce of gold roughly equaled a month's pay for a skilled soldier. In modern shorthand, this is often translated into the idea that "an ounce of gold still buys a good suit," whether in the form of a Roman tunic and armor or a modern business suit.


While elegant, this analogy comes with important caveats. First, the Roman economy was agrarian, highly unequal, and dependent on conquest — wages in denarii or sestertii were not equivalent to modern fiat currency, and soldiers often received spoils or land grants as part of their compensation. Second, the "basket of goods" has changed dramatically: the cost of clothing, food, and housing in antiquity followed completely different dynamics than today's consumer economy. Finally, the analogy often oversimplifies: gold's value relative to labor has not been perfectly constant, and the data we have from antiquity are patchy and contested by scholars.


Despite those caveats, the Centurion example is still a useful narrative device because it captures the intuition that gold has preserved a broad, rough equivalence to basic standards of living across millennia. Just as an ounce of gold could once outfit a Roman officer in fine clothing, it can still purchase a high-quality modern suit today. The durability of this comparison — with all its limitations — helps explain why gold remains psychologically and financially anchored as a store of value across civilizations.


⸻


Key Details & Historical Anchors • Definition: Median hourly wage ÷ gold price per ounce = hours of work needed to purchase one ounce of gold.


Historical Anchors: • 1970 (Bretton Woods): Gold $35; wages $3.38/hr → ~10 hours/oz. • 1980 (inflation peak): Gold $850; wages $6.86/hr → ~124 hours/oz. • 2000 (tech bubble, gold trough): Gold $280; wages $14/hr → ~20 hours/oz. • 2011 (GFC aftermath): Gold $1,900; wages ~$20/hr → ~95 hours/oz. • 2025 (record gold, high wages): Gold $3,662.50; wages $31.46/hr → ~116 hours/oz.


Price & Performance Comparison: • Wages: Grew by roughly four to five times from 1970 ($3.38/hr) to 2025 (~$31.46/hr), ~3.5% CAGR. • Gold: Rose nearly 100× from $35/oz in 1971 to $3,662.50/oz in 2025, ~7–8% CAGR. • Conclusion: Gold's compounding has outpaced wages, raising the hours of work required per ounce over time.


Interpretation Cheat-Sheet: • Low ratio: Gold cheap in labor terms (1970, 2000). • High ratio: Gold expensive in labor terms (1980, 2011, 2025). • Signal: Spikes often align with monetary stress, inflation, or crisis.


Worked Example (2025): • Median hourly wage = $31.46/hour • Gold = $3,662.50/oz • Ratio = 3,662.50 ÷ 31.46 ≈ 116 hours per ounce


Caveats & Nuance: • This measure is U.S.-centric; global wages differ widely. • Roman Centurion analogy is illustrative, not literal; ancient data are fragmentary. • Wages reflect averages, not distribution; inequality affects "real" access to gold. • Ratio is a macro signal of purchasing power, not a precise living-standard metric.


Bitcoin-to-Gold Ratio


Bitcoin-to-Gold Ratio = (Price of 1 Bitcoin in USD) ÷ (Price of 1 oz Gold in USD)


The Bitcoin-to-Gold Ratio measures how many ounces of gold one Bitcoin can buy, directly comparing the newest decentralized monetary asset against one of the oldest. Because Bitcoin is volatile and speculative while gold is steady and defensive, the ratio swings sharply, reflecting the push-and-pull between innovation and tradition. A high ratio signals Bitcoin dominance, while a low ratio shows gold is stronger.


When Bitcoin first launched in 2009, the ratio was effectively zero: BTC traded for pennies, while gold stood above $1,000/oz. In 2011–2013, Bitcoin's first meaningful surge brought it close to parity with gold (~$1,000 each). This was symbolically important — one BTC equaling one ounce of gold. However, Bitcoin's extreme volatility quickly reasserted itself. By 2014, prices had collapsed, and the ratio fell back below 0.2.


The next cycle came with the 2017 bull run, when Bitcoin surged from ~$1,000 in January to nearly $20,000 by December. With gold steady around $1,250/oz, the ratio peaked near 16 BTC-to-gold. This marked Bitcoin's first decisive moment as a mainstream alternative to gold in investor narratives. But, true to form, the bubble burst, and by early 2018 the ratio fell back to ~4–5 as Bitcoin collapsed to $6,000 while gold held steady.


The COVID-19 crisis set up the next phase. In 2020, Bitcoin rocketed past $40,000 while gold traded near $1,800/oz, pushing the ratio to ~22. In late 2021, Bitcoin's all-time high of ~$69,000 versus gold near $1,850 yielded a ratio of ~37, the highest ever recorded. This period became the high-water mark for the "digital gold" narrative. But the crash of 2022–23 pulled Bitcoin below $16,000 while gold held ~$1,750, compressing the ratio back to ~9 — a sharp reminder that gold's stability remains unmatched.


As of September 2025, Bitcoin has surged back above $113,996, while gold has also hit records near $3,662.50/oz. That puts the ratio at roughly 31 BTC-to-gold. This is well below the 2021 extreme, but far stronger than during prior crashes, showing Bitcoin has maintained long-term gains even as gold continues to anchor itself as the world's conservative store of value.


⸻


Key Details & Historical Anchors • Definition: Bitcoin USD price ÷ gold USD price (oz). • Interpretation: Higher ratio = Bitcoin strong vs. gold; lower ratio = gold strong vs. Bitcoin.


Historical Anchors: • 2009–2010: BTC <$0.10; Gold ~$1,000 → ratio ~0.0001. • 2013 (parity): BTC ~$1,000; Gold ~$1,000 → ratio ~1. • 2017 bull peak: BTC ~$20,000; Gold ~$1,250 → ratio ~16. • 2018 crash: BTC ~$6,000; Gold ~$1,300 → ratio ~4–5. • 2020–21 boom: BTC ~$40,000–69,000; Gold ~$1,800–1,900 → ratio ~22–37. • 2022 crash: BTC ~$16,000; Gold ~$1,750 → ratio ~9. • 2025 (current): BTC ~$113,996; Gold ~$3,662.50 → ratio ~31.


Price & Performance Comparison: • Bitcoin: Since 2010, extraordinary ~140% compound annual growth but with 70–80% drawdowns. • Gold: Long-run ~7–8% annualized since 1971; steady, with far smaller drawdowns. • Result: Bitcoin outpaces gold in raw returns but with extreme volatility and adoption risk.


Interpretation Cheat-Sheet: • Low ratio: Gold favored; Bitcoin in crisis (2014, 2018, 2022). • High ratio: Bitcoin speculative dominance (2017, 2021). • Mid-range (~10–30): Balanced environment — Bitcoin maintains strength, gold retains safe-haven demand.


Worked Example (2025): • Bitcoin = $113,996 • Gold = $3,662.50/oz • Ratio = 113,996 ÷ 3,662.50 ≈ 31 BTC-to-gold


Caveats & Nuance: • Bitcoin's short history (16 years) vs. gold's 5,000+ years makes long-term comparison asymmetric. • Gold has universal adoption — central banks, jewelry, reserves — while Bitcoin adoption is concentrated and evolving. • Ratio is highly sensitive to Bitcoin's price swings; a 10% BTC move shifts the ratio by ~3 points. • Useful as a sentiment and regime indicator, not a precise valuation tool.


Ethereum-to-Gold Ratio


Ethereum-to-Gold Ratio = (Price of 1 Ether in USD) ÷ (Price of 1 oz Gold in USD)


The Ethereum-to-Gold Ratio measures how many ounces of gold a single ETH can buy. It places Ethereum—programmable "internet money" with smart-contract utility—directly against gold, the classical monetary hedge held by central banks. A high ratio signals the market is favoring crypto risk and network utility; a low ratio shows preference for the safety and scarcity of gold.


Ethereum launched in 2015 and traded near pennies to a few dollars at first; in ratio terms ETH bought essentially no gold. By the 2017–18 boom, ETH briefly topped $1,400 (Jan 2018), pushing the ratio above 1 as gold hovered around the low-$1,300s—an early proof that crypto could, at times, rival bullion on a per-unit basis. Then the 2018 bear market crushed ETH back below $100 and the ratio collapsed.


A new cycle began with DeFi/NFT adoption and macro liquidity in 2020–21. ETH's climb to successive records (ultimately >$4,800 in late 2021) sent the ratio over 2.5 ounces per ETH when gold traded in the $1,800–1,900 area. This cemented Ethereum's status as the growth, utility-driven alternative to gold's defensive role.


Structural changes also mattered. EIP-1559 (2021) began burning the base fee of every transaction, and the Merge (Sept 15, 2022) shifted Ethereum to proof-of-stake, slashing net issuance by roughly ~90% and, at times, making supply slightly deflationary when on-chain activity was high. (Since 2024's Dencun upgrade, supply has oscillated between mildly inflationary and deflationary depending on network demand.) These monetary-policy dynamics differentiate ETH from BTC and from gold's fixed above-ground stock.


As of September 2025, ETH trades around $4,332.76 and spot gold sits near $3,662.50/oz (fresh record territory), putting the ratio near 1.18—one ether buys a little over one ounce of gold. The inverse (gold-to-Ethereum) is about 0.85 ETH per ounce. That's far below the 2021 extreme but well above crypto-winter lows, reflecting a market that values both: gold for safety, Ethereum for utility and network effects.


⸻


Key Details & Historical Anchors • Definition: ETH price ÷ gold price (oz). High = ETH strong vs. gold; low = gold strong vs. ETH. • Utility vs. hedge: ETH carries programmability, staking yield, and fee-burn dynamics; gold carries durable scarcity and central-bank demand.


Historical Anchors (selected): • 2015–16: ETH near $1 or less; ratio ≈ 0.


• Jan 2018: ETH ≈ $1,400+ → ratio briefly >1 (gold ~low-$1,300s).


• 2018 low: ETH ≈ $80–$90 → ratio ≪1.


• Late 2021: ETH record >$4,800 → ratio >2.5 when gold ≈ $1,8xx.


• Aug 2025: ETH notches new ATH ≈ $4,946 intraday.


• Sep 2025 (current): ETH $4,332.76; gold ~$3,662.50 → ratio ≈ 1.18.


Monetary-Policy Milestones (ETH): • EIP-1559 (Aug 2021): burns base fee each block.


• The Merge (Sep 15, 2022): Proof-of-stake; energy use ↓ ~99.95%; net issuance ↓ ~88–90%; supply sometimes deflationary when activity is high (post-Dencun, occasionally inflationary).


Price & Performance Context: • Gold (long-run): lower volatility; new record >$3,662.50 in Sept 2025.


• Ethereum (since 2015): outsized returns with deep drawdowns; fundamentals influenced by fees, burn, staking, and adoption.


Interpretation Cheat-Sheet: • Low ratio: Flight to safety; gold leadership; crypto risk-off (e.g., 2018, 2022). • High ratio: Risk-on and network-growth narrative; ETH leadership (e.g., 2021). • Mid-range: Balanced macro: gold strong on policy fears, ETH supported by utility/staking.


Worked Example (today): • ETH = $4,332.76 (Coin-indexed price). • Gold = $3,662.50/oz (Reuters record highs).


• ETH-to-Gold Ratio ≈ 1.18 (and Gold-to-ETH ≈ 0.85).


Caveats & Nuance: • Crypto prices are highly volatile; intraday swings change the ratio quickly. • ETH's supply can be mildly inflationary or deflationary depending on activity—post-Merge issuance is lower, but the burn varies with fees.


• Comparing a utility token (ETH) to commodity money (gold) blends different risk/return profiles; use the ratio as a sentiment and regime gauge, not a single-asset verdict.


Gold-to-Art/Collectibles Ratio


Gold-to-Art/Collectibles Ratio = (Value of artwork/collectible in USD) ÷ (Gold Price per oz in USD)


This ratio is conceptual, not standardized, showing how many ounces of gold are needed to buy a given artwork or collectible. It illustrates wealth storage in culturally significant but illiquid assets versus the long-standing monetary function of gold.


Historically, art was often priced in gold. For example, during the Renaissance, artworks commissioned by elite patrons were valued in gold ducats. In modern times, the 2015 Christie's sale of Picasso's Les Femmes d'Alger (Version O) fetched $179 million—equivalent to approximately 48,950 oz of gold at $3,662.50/oz.


Collectibles follow similar patterns. A Rolex Daytona "Paul Newman" worn by the actor himself sold for $17.75 million in 2017, equal to around 4,847 oz of gold (at $3,662.50/oz).


Rare whisky also shows striking results: The Macallan 1926 bottle sold for $2.714 million in 2023, equivalent to roughly 741 oz of gold at today's prices.


These examples show how art and collectibles can dramatically outperform gold in ounce terms—but at the cost of illiquidity, subjective valuation, and high transaction complexity.


⸻


Key Details & Historical Anchors • Definition: (Price of item in USD) ÷ (Gold price per ounce) = ounces of gold needed. • Assets: • Gold → liquid, divisible, globally recognized store of value. • Art/collectibles → unique, context-dependent, illiquid, subject to tastes and trends.


Significant Anchors: • 2015 Picasso (Les Femmes d'Alger): $179 million → ~48,950 oz of gold.


• 2017 Paul Newman Rolex: $17.75 million → ~4,847 oz of gold.


• 2019 Macallan 1926 whisky: $2.714 million → ~741 oz.


Performance Comparison: • Gold: Steady ~7–8% nominal annual growth with low volatility. • Art/collectibles: Highly variable. Auction indices (e.g., Mei Moses) suggest long-term returns of ~4–6%, heavily skewed by record-setting sales.


Cheat-Sheet: • Low ratio: Art is "cheap" relative to gold (rare in modern high-end markets). • High ratio: Works/collectibles command huge premiums—often due to cultural significance, rarity, or provenance.


Worked Examples (2025 gold @$3,662.50/oz): • Picasso → ~48,950 oz. • Paul Newman Rolex → ~$17.75M ÷ 3,662.50 ≈ 4,847 oz. • Macallan whisky → ~$2.714M ÷ 3,662.50 ≈ 741 oz.


Caveats: • Art/collectible valuations reflect rarity, trends, and prestige—not base valuation. • These items have high transaction costs (auctions, insurance, bidding premiums). • Gold remains universally liquid and fungible; art and collectibles are niche and subjective.

 

[Pluto]