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When comparing the S&P 500 to the Barron’s Gold Mining Index (BGMI), the ratio reached a high of 6.32 during the 1987-2000 bull market. The ratio today is 6.39. The higher the ratio, the cheaper gold companies are which means…we are seeing the cheapest gold stocks ever!
The above comments, and those below, have been edited by Lorimer Wilson, editor of munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here) for the sake of clarity ([ ]) and brevity (…) to provide a fast and easy read. The contents of this post have been excerpted from an article* from palisade-research.com originally entitled The Bulls and Bears of the S&P 500: Just Another Chart Showing How Cheap Gold Stocks Are and which can be read in its unabridged format HERE. (This paragraph must be included in any article re-posting to avoid copyright infringement.)
Will gold companies become even cheaper? No one knows, but buying at unprecedented lows is not a bad idea.
*http://palisade-research.com/the-bulls-and-bears-of-the-sp-500-just-another-chart-showing-how-cheap-gold-stocks-are/
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