Dow to Gold Ratio (Chart) - How Much Are All the Dow Jones Companies Worth Expressed in Gold
One of the methods investors can use to help to determine the future price of gold is the Dow to Gold ratio. The
Dow to Gold ratio looks at how many ounces of gold it takes to purchase all the companies in the Dow Jones index,
assuming every point in the index represents one dollar.
If you are interested in my thoughts as to where I believe the Dow to Gold ratio will go to, I recommend you to
read the note at the bottom of the page.
As you can see in the Dow to Gold ratio chart above1 there are periods in recent history where
investors have lost confidence in paper assets. These periods come shortly after the performance of the Dow Jones
index has peaked and are referred to as a financial crisis. Looking at the chart, it seems that at the end
of every financial crisis the Dow to Gold ratio comes down to between 2.9 and 1.4 to 1.
How to Calculate Today's Dow to Gold Ratio Yourself
In the following widget from LiveCharts.co.uk you will find real time market data for the Dow Jones index and the
You can calculate today's Dow to Gold ratio yourself by dividing the value of Dow Jones index by the
value of the gold price and with the outcome there are two possible conclusions:
The price of the Dow is too high, or
The price of Gold is too low.
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Note: In today’s world governments and
central banks do anything in their power in order to prevent the total collapse of the
economy. Therefore I must conclude that we are in the midst of a financial crisis! This means
that the price of the Dow is too high or that the price of Gold is too low. As with all things in life: the
truth lies somewhere in the middle. I believe that the Dow Jones index will come down and that the price of
gold will go up.Eventually, I believe the Dow to Gold ratio will come down to between 3:1 and
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How I Conduct My Stock's Due Diligence Investigation Process.If
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Are These the Best Stocks to Buy Today.In my stock watchlist you
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Are These the Best Shares to Buy Now.As the year 2015 has just started, I
believe it's about time that I share my stock portfolio with you. Therefore, you will find my
updated stock portfolio on this page.
Jeroen Snoeks is the founder of UndervaluedEquity.com, a website for
investors passionate about investing in undervalued stocks. ThroughUndervaluedEquity.com, he shares his
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