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Mike McGlone highlights a significant shift in the relationship between the S&P 500 and gold. The price ratio of the S&P 500 in ounces of gold has dropped to 1.39, falling below the low seen in 2020.
This decline raises questions about whether gold is becoming too hot as an asset. Historically, the market often sees a rebound in this ratio during such extreme levels, yet gold has not reached alpha at these elevated positions before.
Such market dynamics recall McGlone's earlier examination of the risks facing precious metals, as outlined in his analysis of the potential for a 2026 reversion in silver and gold prices. Broader commodity trends, including the impact of cyclical forces and S&P 500 volatility, are further explored in his forecast for WTI crude oil prices through 2026, underscoring the interconnectedness of asset classes during periods of market stress.