Historical Performance Across Economic Cycles
Gold's performance varies significantly across different economic environments. Understanding these patterns helps inform strategic allocation decisions.
1970s
Nixon Shock & Oil Crises
1980s
Volcker Shock & Rising Rates
2000s
Dot-com Crash & Housing Bubble
2010s
QE Era & Low Rates
2020s*
Pandemic & Fiscal Stimulus
Key Insight: Gold as a Consistent Outlier
While short-term performance varies, gold has consistently served as a portfolio diversifier and wealth preserver over longer time horizons, especially during periods of monetary instability and high inflation.
Market Ratios & Economic Indicators
Key ratios and indicators that help understand gold's relative value and positioning within the broader economic environment.
Dow-to-Gold Ratio
When high, gold is undervalued relative to stocks. When low, gold outperforms.
Gold vs M2 Money Supply
Tracks gold price relative to monetary base expansion. Shows currency debasement impact.
Real Interest Rates
Negative rates favor gold as it removes opportunity cost of holding non-yielding assets.
The Bubble Meter: Historical Lessons
Throughout history, asset bubbles have followed similar patterns. Gold has consistently served as a safe haven when these bubbles burst, providing portfolio protection.
Tulip Mania (1637)
Tulip Bulbs
South Sea Bubble (1720)
South Sea Company
Japanese Asset Bubble (1989)
Real Estate/Stocks
Dot-com Bubble (2000)
Tech Stocks
Pattern Recognition: Bubble Warning Signs
Asset bubbles share common characteristics: speculative mania, widespread public participation, extreme valuations, and new paradigm narratives that claim "this time is different."
Gold has historically provided portfolio protection during these events, often appreciating while other assets experience severe corrections.