With everyone focused on the Fed meeting, today King World News thought it was a good idea to take a step back and look at the big picture of the war between gold and the Federal Reserve. This led to a remarkable question: Is the price of gold headed above $12,000?
MacroTrends: This chart (below) shows the ratio of gold (priced in dollars) to the S&P 500 market index (currently .56). This ratio is a good indicator of investor confidence in the dollar/fiat currency system. A low ratio signifies high confidence (gold low, S&P high) and a high ratio signals a lack of confidence (gold high, S&P low). The ratio hit a peak of 5.94 back in January of 1980 when gold briefly traded over $800 an ounce.
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