Savers and investors use this one tool to find the best time to buy and sell gold and stocks. Here's why it's so great.

What can we learn from the Dow-to-Gold ratio?

What Can We Learn From the Dow to Gold Ratio?

GA News

The Spotlight

Newsdesk

Studies & research

 or investment portfolio, you might think you need a magic crystal ball 🔮 to predict the 

, and pick the right time to buy or sell your bars and coins.  

Well, it's almost true. There’s no strategy that will give you a definite answer, but there’s a tool that could help you make a well-informed decision. It’s called the

Over the years, this ratio has helped many savers and investors avoid some of the biggest stock market crashes, 

steering them toward safe-haven assets like gold at the right time

Let’s see how the Dow to gold ratio works and how it can help you understand 

Financial graphs and digital indicators overlap with modernistic urban area

The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index that tracks the stock price of 

Amongst them: Apple, Goldman Sachs, Johnson & Johnson, McDonald's, IBM, Coca-Cola, etc...

 how many ounces of gold it takes to buy the shares in the Dow Jones Industrial Average index

. For example, if the ratio is 10, that means we need 10 ounces of gold to buy the Dow.

Now, this ratio is actually pretty useful because it can tell us whether stocks or gold are more expensive or cheap. Here's how it works:

stocks are expensive and gold is undervalued

. In other words, you'll need a lot of gold to buy the Dow, which means stocks are probably overpriced compared to gold. Conversely, when the ratio is low, that means 

stocks are undervalued and gold is expensive

So what does this all mean? Well, basically, if the ratio is increasing, that's a sign that you might want to sell some of your stocks and buy some gold instead, and vice versa.

Investors have been using the gold-to-Dow ratio for over 100 years to 

One notable investor who uses this ratio is Bill Bonner, who focuses on the 

. Bonner sells stocks and buys gold when the ratio goes above 15, indicating that gold is undervalued compared to the Dow. 

Otherwise, Bonner sells gold and buys stocks when the ratio falls below 5, suggesting that stocks are undervalued relative to gold.

 it takes 15 ounces of gold to buy the Dow. Gold is considered undervalued (cheap) compared to the Dow Jones Index.

 this means that it takes just 5 ounces of gold to buy the Dow. Stocks are undervalued relative to gold.

To give you some more pointers, let’s also take a look at how the Dow to gold ratio has worked through history.

Throughout history, the gold-to-Dow ratio has experienced significant fluctuations, ranging from a low of 1.0 during the stock market crash of 1980 to above 40 during the dot-com bubble of 2000.

Wallstreet bull and bear on stock chart background representing a positive outlook for gold

, which means that those who use the ratio might interpret these fluctuations as a reason to be 

A historic Dow to Gold ratio chart running from 1930 to 2023.

As you can see, in June 2022, the Dow to gold ratio experienced a significant decline. Analysts have noted that following financial crises, the ratio tends to decrease rapidly. For instance, in 2010, the ratio dropped to approximately 7, and in 1980, it fell to as low as 1.

However, in January 2023, the ratio went 

territory, according to Bill Bonner’s take on the Dow to gold ratio.

So, are you planning to follow the ratio and ditch some of your stocks to get yourself some 

Gold offers several powerful advantages as a store of value. Discover why more and more investors are turning to this precious metal.

What are the advantages of gold compared to other investments?

A look at the strong changes in demand in the gold sector y-o-y.

A Shift in Gold Demand Trends

Good thing central banks can't print gold. 😉

21.9% Annual Inflation... and Counting

Despite slowing down, the frenzy around silver has kept prices up, and demand for physical bars and coins strong, while doubts over the state of the silver stocks emerge. Is Silver Setting the Stage for a Breakout?

Is Silver Setting the Stage for a Breakout?

We are thrilled to announce that our CEO Alessandro Soldati was invited for an open and lively discussion on a popular YouTube channel Frugalisme et Liberte Financiere.

How to Buy Physical Gold Online in 2022?

Choosing between gold and silver: A comparison to help you decide which metal might be right for you.

Should You Buy Gold or Silver?

What is “silversqueeze”? Learn how supply, demand, and investor behaviour affect silver prices – and why current market tension isn’t a true silver short or silver squeeze yet.

Silver Squeeze: What’s Really Happening in the Silver Market?

The Federal Reserve’s inflation goals are getting risky and could cause the rate to overheat dangerously if they were to push it too hard.

The Fed’s Dangerous Game

Meet GOLD AVENUE CEO, Alessandro Soldati, in our first Q&A video session!

Q&A with our CEO - Alessandro Soldati

The Fed desperately wants higher inflation that would exceed its 2% target. Will the ECB follow the lead? It looks like it. 

Does the European Central Bank Want High Inflation?

Russia’s decision to remove the US dollar assets from its sovereign wealth fund and partially replace them by gold boosts the yellow metal’s importance as a strategic asset.

Russia's New Move on Gold

After yet another central bank starts considering negative interest rates, we’re taking a look at how unlimited debt can impact physical gold investment.

Is Unlimited Debt Good for Gold?

World markets have taken a hit as the Russian invasion of Ukraine spooked investors around the globe. Here’s what you can do right now to protect your investment portfolio and gold savings.

Ukraine-Russia Conflict: What Impact on Your Savings?

You probably noticed certain industries and communities aren’t bouncing back as quickly as others during times of recession or economic crisis. That’s what the K-shaped recovery is all about.

What the K-Shaped Recovery Means for Gold

You want to start investing but you don't know where to start? Here is a beginner’s guide to investing.

How to Start Investing in 2023? Here's What You Need to Know

The #silversqueeze movement took the investment world by storm and has the potential of shaking up the silver market. Will it be here for the long term?

#silversqueeze

Here’s a rare sneak peek into one of the world’s biggest gold refineries. 

How Do You Make Gold Bars?

In 2021, central banks continued buying gold, with emerging countries stepping up as key net buyers. Do you wonder why? Here’s what you need to know.

Central Bank Gold Buying Explained

With inflation soaring in Europe and the U.S, learn how to navigate higher consumer prices from this great personal finance video from Sorelle Amore.

5 Ways to Protect Your Wealth From Inflation

After Russia’s invasion of Ukraine, investors rushed to gold, the world’s oldest safe-haven asset, pushing its price to a new record. Why did this happen? Here’s what you need to know. 

Investor Gold Demand is Booming Right Now: Here's Why 

On August 15, 1971, U.S. President Richard Nixon possibly made the biggest monetary error in history. A video from Libre & Riche will tell you why.

All You Need to Know About the World’s Greatest Monetary Catastrophe

The U.S. Federal Reserve has announced its first interest rate hike since 2018. What could this mean for the gold price? Here’s what you need to know. 

How Interest Rate Hikes Affect the Gold Price

It seems that the ongoing US presidential election has not changed the situation in the gold market so far as the macro backdrop remains quite favorable to the yellow metal.

Trump + Biden = Gold?

Do you want to buy gold bars but are not sure where to start? Here’s what you need to know to build your precious metals portfolio in a smart way.

How Do You Buy Physical Gold Bars? 

The backdrop of global inflation in the U.S. and Europe was already worrying. Now, Russia’s invasion of Ukraine is making the situation even worse, including sending gas prices soaring to record levels. Here’s what you need to know.

Here’s How Rising Gas Prices and Inflation Fuel Each Other

It looks like stagflation could be here soon. Here’s what you need to know to understand the economic phenomenon that stifled growth through the 1970s.

What Is Stagflation and Why Should We Worry About It?

Leading world banks say we should get ready for a new recession shock. What does it mean exactly, and what investments might be the best place to stash your hard-earned money?

Recession Risk is Rising, Economists Say. Here's What It Means for Investors

If you are a parent, you probably want to find the best way to set your kids up for financial success. Here’s how your gold savings will help you start building their lifelong wealth.

3 Ways Gold Savings Can Benefit Your Children and Family

Easy is always right. Especially when it comes to buying precious metals. If you still don’t know what’s the easiest way to buy gold, you’re in the right place.

The Easiest Way to Buy Gold and Precious Metals

If your children are the lucky ones to get a hoard of gold as an inheritance, there are 4 things you should do before passing it on to them.

4 Things to Remember When Buying Gold for Your Children

Here are the 4 handy tips you can immediately put into practice when buying physical gold for the first time.

How Do You Buy Gold? A Beginner’s Guide

Swissmint made history as they issued their first-ever 50-franc Vreneli gold coin on May 11, 2022, making a very special coin even more popular in Switzerland and beyond.

Swissmint Issues a New Limited-Edition Vreneli Coin

The end of Bretton Woods seems to be an essential reason behind the widening of the productivity-pay gap that reveals gold's influence as a source of stability.

What is the Productivity–Pay Gap?

A quick overview of the performance of gold versus some of the major commodities for the first half of 2020.

🔥 Gold VS Commodities 🔥

You read in the press that persistently high inflation has finally peaked and should be going down soon. But the latest CPI numbers show it might not be entirely true. Here’s why.

Has Inflation Peaked? Here's What You Need to Know to Understand Inflation

Since the start of 2022, the stock market has been on a wild ride, while gold was close to hitting a new record high in March. Which has performed better so far? We guess you already know.🙃

Gold Price Vs. Stock Market: 2022 Edition

While the Fed is taking a dovish stance, investors are fearing a real rise in inflation in the near future.

Is the Fed Moving Too Slow to Counter Inflation?

Have you been thinking of investing in platinum bars and coins? Here’s what you need to know about one of the world’s rarest precious metals.

Investing in Platinum: A Beginner’s Guide

Thanks to GOLD AVENUE, Tibo InShape was able to enter the famous gold refinery MKS PAMP. Watch the video and follow Tibo in his discovery of gold!

Tibo InShape & GOLD AVENUE: visit of a gold refinery in Switzerland!

GOLD AVENUE’s CEO Alessandro Soldati was selected by Bilan magazine as one of French-speaking Switzerland's most promising young entrepreneurs.

Bilan Chooses GOLD AVENUE Among Switzerland’s Top Young Startups

Country-specific guides to understand gold as an investment in 2021 from the World Gold Council.

The relevance of gold as a strategic asset: 2021

Famous precious metal skeptic buys gold as a hedge against accelerating inflation which he says is “reminiscent of the 1970s”.

Lifelong Gold Skeptic Makes Major U-Turn

While stocks and bitcoin went down sharply due to rising inflation and uncertain economic outlook, gold has retained its value, exactly when investors and savers needed it. 

Bitcoin, stocks, gold: What is the best investment today?

What does the future hold for gold? Here are the 4 trends that could make the yellow metal shine in the nearest future.

Is the price of gold going up next year? 4 main drivers explained

A gold hunt story that captivated thousands and inspired a decade-long obsession with the famous Forrest Fenn treasure.

The Mysterious Hunt for Forrest Fenn's Gold Treasure

Gold has been with us since pretty much the dawn of civilization, and yet there have been a number of harmful myths surrounding this precious metal.

5 Myths About Gold Investment

This is the incredible story of one of the biggest gold scandals in history which started in Canada and ended in the depths of the Borneo jungle.

The Biggest Gold Mining Scandal in History

As the Fed raises interest rates and Russia squeezes gas supplies to Europe, it looks like the global economy is slowly but surely drifting into a recession. Will it happen by the end of 2022, and what does it mean for gold? 

Is a Recession Coming in 2022? 

If you are a beginner investor, choosing the right time to buy physical gold and silver may not look like an easy task. But in reality, it’s quite simple. Especially if you know the right investment strategy.

Is It a Good Time to Buy Gold?

Is today’s rising inflation mimicking a time when a sudden jump in inflation took investors by surprise? Top economic historian Niall Ferguson might have the answer.

Where is Inflation Going? An Economic Historian Gives His Answer

Did you know that gold came to Earth from outer space and grows on trees? If not, take a look at some interesting facts about the shiny metal. Some of them sound too unbelievable to be true.

13 Interesting Facts About Gold You Probably Didn't Know

Although economic downturns are a normal part of the economic cycle, you should still be prepared for them when they occur. Here are 5 tips to set you on the path.

How to Prepare for a Recession: 5 Things You Need to Know

Fort Knox holds more secrets than we will ever know, but the biggest one is: how much gold, if any, is there in America’s most famous bullion bunker?

The Golden Secret of Fort Knox 

The Russian central bank has announced it now holds more gold than U.S. dollars in its reserve, striking a blow to the American currency and confirming Putin’s strategy of exiting the greenback.

From Russia with Love

Can central banks keep printing money forever, no matter how deep into the red a country goes? In this new world, nothing is certain.

Central Banks Vs. The Old World

Consumer demand for physical gold increased in Q1 2021, with bar and coin investment up by 36% y-o-y. Take a look at the chart.

Consumer Demand for Physical Gold on the Rise in 2021

Summer is fun, but it can also be very expensive. By following these few simple steps, you will learn how to budget and retrain your brain to save money. 

Financial Detox: How to Save Money After the Summer Break

There are many myths about saving and investing. One of them is that they’re the same thing. As a matter of fact, it isn't true at all. Here’s what you need to know about saving and investing to secure your financial future.

Saving vs. Investing: Which One to Choose?

More than 150 years ago, one man found a gold nugget in a faraway land triggering the legendary California Gold Rush that changed the world forever. 

5 Weird But True Facts About the California Gold Rush

Gold emerges as a clear winner in a “battle” against fiat currencies that have considerably lost in value against the precious metal over the past 20 years. Take a look at the chart!

Gold vs. Fiat Money

You want to set and reach saving goals? Here are simple ways to manage your personal finance, start saving money, or work toward an emergency fund, all safe from inflation.

How to Save Money Each Month? 

Europe is experiencing its worst energy crisis in 50 years. Rising energy prices are fueling already high inflation that could seriously affect your savings. Here's how to protect yourself. 

Europe’s Energy Crisis: How to Prepare for Winter?

With a recession looming, 2022 will likely remain a rollercoaster for the stock markets. Now might be the time to rebalance your portfolio and focus on your long-term financial goals. Let's see how.

Tips for Navigating Stock Market Volatility

With inflation moving down at a slow pace and the possibility of stagnation looming in the U.K., let’s explore some practical tips on how you can protect against inflation.

How to fight inflation?

How can different emotional biases affect your investment decisions, and what can you do to avoid them? Here’s what you need to know.

How to Invest: 4 Tips to Avoid Emotional Investing

Worries among US top investors are mounting as the Fed is stuck between two bad choices: letting inflation spiral out of control or crash the markets.

Are Inflation Worries Mounting?

What is the story behind the Golden Fleece myth? And how is it related to gold mining? Come dive into this ancient story and learn one thing you probably didn't know about gold.

The true story behind the Myth of Jason and the Golden Fleece

Almost every European economy is now facing eye-watering inflation sparked by rising food and energy prices. And it seems that things will only get worse before they get better.

Why Is Inflation so High in Europe? Here’s What You Need to Know

How to invest in gold? As a precious metals investor, here’s what you need to know about gold, its uses, and its main price drivers when building your gold savings.

Investing in Gold: A Beginner’s Guide

With a recession looming and inflation still at decades-high levels, it may be a good time to start growing your gold savings. Here’s what you need to know about investing in gold in 2023.

Will Gold Be a Good Investment in 2023?

There has been a mysterious drop in silver stocks on major international trading platforms that created quite a buzz. Could it make the silver price surge next year? Here’s what you need to know.

Why Are Physical Silver Reserves Suddenly Dropping?

Gold purity plays a big role in its quality — but what do carats have to do with it? We break it down and explain the key differences between 24 and 18 carat gold.

24-Carat vs. 18-Carat Gold: What’s the Difference?

You don't want to miss out on our GOLD FRIDAY offer this year! If you're looking for a way to start building your gold savings, this is the perfect opportunity for you.

Start Your Gold Savings With Our Special GOLD FRIDAY Offer

Qatar is hosting the 22nd FIFA World Cup, a tournament featuring one of the most prestigious trophies in the world. What is it made of? Is it 100% pure gold? If you are a true football fan, there are a few things you'll want to know.

Is the FIFA World Cup Trophy Made of Pure Gold?

The holidays are about more than candy canes, shopping lists and wrapping paper. They are a season of rituals, stories and gifts that carry meaning from one generation to the next.

Gifting Gold in the Holiday Season: Why Precious Metals Make a Timeless, Meaningful Present

Why do we put our money into long-term investments, including physical gold? To protect our savings, have a cushion if things get tough ... and secure the future of our loved ones!

Inheritance and Taxes: Saving in Gold for Your Children's Future

Discover how the gold price in global currencies performed in 2025. Compare gold in USD, EUR, GBP, CHF and JPY, and learn how currency movements shape real returns.

The Price of Gold in Global Currencies: 2025 Year-End Review

2022 was a year of surprises and global transformation. What impact did these economic and political events have on your investments, and what lies ahead? Take a look at our end-of-year digest.

Top 7 World Events That Affected Your Investments in 2022

What will be the key factors determining the gold price in the new year? What are the chances of gold reaching new heights? Here are some of the most interesting forecasts for 2023.

Will the Gold Price Rise in 2023?

We wish you a happy and prosperous new year!

Happy holidays from the GOLD AVENUE team

What are the fundamental similarities and differences between gold and cryptos? Can bitcoin replace the yellow metal as an inflation hedge? Take a look at our essentials guide.

Gold Vs. Crypto: Which One Is a Better Investment?

2023 is the Year of the Rabbit, a symbol of longevity, peace, and prosperity in Chinese culture.

Happy Lunar New Year!