S&P500 Priced in Gold(pricedingold.com)
pricedingold.com
S&P500 Priced in Gold
https://pricedingold.com/sp-500/
54 comments
And to be extra fair, we might want to subtract tax from those dividends before reinvestment.
Storing that gold most cost something too.
Storing gold costs nothing but a little space which isn't an issue given how compact it is.
Oh good. I have a spare spot in my front yard to place it. Or maybe I'll just set it down on my dining room table.
Wait...I might want something more secure than that. And if I have a lot of gold I might need to pay people to protect it. These storage costs are going up.
Wait...I might want something more secure than that. And if I have a lot of gold I might need to pay people to protect it. These storage costs are going up.
Ridiculous. Gold takes very little space. No individual really has a lot of it where storage becomes a constraint. It is obvious when someone has an agenda against it.
You can fit millions of dollars worth of gold in a shoebox. Space is not an issue for any normal-person amount of wealth in gold.
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The point of this entire website isn't about gold vs equity as an investment, it's about gold vs fiat currency as a superior measurement of value.
https://pricedingold.com/about/
https://pricedingold.com/about/
It's not very convincing, though: there's a huge runup in gold prices (as is often the case) between 2023 and the present, and a long do-nothing period before that (also often the case). The major consumers of gold are about: 50% jewelry, 10% industrial, 20% central banks, a large run-up from about 10% in the 2010s.
I like to think about the inherent contradictions of goldbugs going long on central bank portfolio policy: they both tend to distrust the central bank but in a way the central bank activities partially endorse their habits, and are the source of recent appreciation and thus accusations of "hidden" inflation. But central banks operate in an anarchic world system where they need something even independent of reserves held in other sovereign currencies, I presume most gold bugs are holding ETFs in an existing financial system (which is non-orthogonal: if you assume a financial system, why not avail yourself of the superior alternatives?) or have it in a safe in their house which has some other obvious problems.
I hold no gold, if I want hydraulic and non-volatile inflation compensation, it's quite simple: short-dated sovereign debt, aka the humble money market fund, which can be seen as the lower-fee version of the checking account. Nobody likes being a sucker, holding debt for below the time value of money, including changes in nominal value. It has immense price discovery pressure, and it finds its level nicely. If I were to hold gold, I would need some viable theory about how much I should hold to be de-correlated from other assets to be worthwhile. Maybe if I was exposed to jewelry costs and wanted to hedge them.
See https://www.jpmorgan.com/insights/markets-and-economy/market..., https://www.ecb.europa.eu/press/other-publications/ire/focus...
I like to think about the inherent contradictions of goldbugs going long on central bank portfolio policy: they both tend to distrust the central bank but in a way the central bank activities partially endorse their habits, and are the source of recent appreciation and thus accusations of "hidden" inflation. But central banks operate in an anarchic world system where they need something even independent of reserves held in other sovereign currencies, I presume most gold bugs are holding ETFs in an existing financial system (which is non-orthogonal: if you assume a financial system, why not avail yourself of the superior alternatives?) or have it in a safe in their house which has some other obvious problems.
I hold no gold, if I want hydraulic and non-volatile inflation compensation, it's quite simple: short-dated sovereign debt, aka the humble money market fund, which can be seen as the lower-fee version of the checking account. Nobody likes being a sucker, holding debt for below the time value of money, including changes in nominal value. It has immense price discovery pressure, and it finds its level nicely. If I were to hold gold, I would need some viable theory about how much I should hold to be de-correlated from other assets to be worthwhile. Maybe if I was exposed to jewelry costs and wanted to hedge them.
See https://www.jpmorgan.com/insights/markets-and-economy/market..., https://www.ecb.europa.eu/press/other-publications/ire/focus...
When people talk about inflation, I don't think they're referring to just CPI, but asset inflation too. Things like equities, real estate, gold/silver/platinum, bitcoin, etc.
These have been outpacing CPI because they're levered by cheap debt, brought to you by central bank actions that keep rates low so governments can play the same levered games with their own runaway fiscal policies.
These have been outpacing CPI because they're levered by cheap debt, brought to you by central bank actions that keep rates low so governments can play the same levered games with their own runaway fiscal policies.
That's a lot of financial devices painted with a broad brush, and I think the charge that so may central banks are knuckled under with fiscal dominance is simply not sustainable. The ones that are, we tend to hear about.
Because there's a lot one could write about each of: equities, real estate, gold, silver, platinum (which have very different industrial exposures), and bitcoin, which have many price drivers.
So let's try something more parsimonious: what do you make of people, institutions, etc that bid on short and even long-dated sovereign debt around the globe, and come up the collective discovered price of, say...3.5%, annualized, for maturity in a month? https://www.treasurydirect.gov/auctions/announcements-data-r...
Because there's a lot one could write about each of: equities, real estate, gold, silver, platinum (which have very different industrial exposures), and bitcoin, which have many price drivers.
So let's try something more parsimonious: what do you make of people, institutions, etc that bid on short and even long-dated sovereign debt around the globe, and come up the collective discovered price of, say...3.5%, annualized, for maturity in a month? https://www.treasurydirect.gov/auctions/announcements-data-r...
As a "measurement of value" they both suck. Gold is (extremely) volatile and currency inflates.
Well, you can't do much to correct for the speculation noise in gold. But maybe we can attack from the other side. Maybe we could record prices for various representative products in a giant data set somewhere and calculate and record, I dunno, a "price index" that normalizes the prices to a value that is stable over time.
I bet people would pay good money to look at a chart like that. Maybe we could find one.
Well, you can't do much to correct for the speculation noise in gold. But maybe we can attack from the other side. Maybe we could record prices for various representative products in a giant data set somewhere and calculate and record, I dunno, a "price index" that normalizes the prices to a value that is stable over time.
I bet people would pay good money to look at a chart like that. Maybe we could find one.
Unfortunately Goodhart's law has rendered official inflation measures borderline useless, as anyone who has been shopping for food for the last decade can tell you.
Taking your example in good faith: Gold is four times as expensive today as it was at this time in 2015. Has food seen a 4x increase? No, right? So gold is volatile on a level way beyond inflation. QED.
Are CPI measurements difficult? Sure. It takes a bunch of expert eggheads and a lot of shouting to come to consensus. Still better than trusting some kind of magical commodity market to tell you.
Are CPI measurements difficult? Sure. It takes a bunch of expert eggheads and a lot of shouting to come to consensus. Still better than trusting some kind of magical commodity market to tell you.
> Gold is four times as expensive today as it was at this time in 2015
easy to explain. Gold has a supply constraint. More demand causes prices to rise. When you have a currency following a heavy inflationary trend, people buy Gold, so the price of Gold goes up.
easy to explain. Gold has a supply constraint. More demand causes prices to rise. When you have a currency following a heavy inflationary trend, people buy Gold, so the price of Gold goes up.
People buying gold speculatively as an inflation hedge is exactly the opposite of gold being a source of stable value, though. Gold is "inflating" far, far faster than currency (edit to clarify: far faster than currency-valued goods; gold "interpreted as" a currency is deflating catastrophically), you just pointed it out!
There are a shocking number of gold-happy nerds on this site who are going to be shocked and horrified the next time it crashes (which is has, and will again). The nonsense the largely-partisan smarter-than-thou media you're watching is feeding you is nonsense, and at some point you're going to discover that via great suffering.
There are a shocking number of gold-happy nerds on this site who are going to be shocked and horrified the next time it crashes (which is has, and will again). The nonsense the largely-partisan smarter-than-thou media you're watching is feeding you is nonsense, and at some point you're going to discover that via great suffering.
You don't even need to trust CPI alone when looking in history, where things have evened out a bit: we have historical short-term bond yield data, even the yield curve: people bidding on short periods with the safest debtor expecting changes in nominal value.
Not to suggest CPI is redundant, there's a reason why central bankers read it after all. For one, it's the most timely data they have. But it's impossible to nudge it year after year -- accumulative error -- without it become obviously decoupled from other data, including the long-term bond market data. It just so happens commodities are the wrong yardstick.
Not to suggest CPI is redundant, there's a reason why central bankers read it after all. For one, it's the most timely data they have. But it's impossible to nudge it year after year -- accumulative error -- without it become obviously decoupled from other data, including the long-term bond market data. It just so happens commodities are the wrong yardstick.
Great! We can start trading with each other in stock notes. I can't wait to buy my next round of groceries with a 0.1 SPY note! The ones I don't use will pay dividends!
you're joking, but this is basically what it means to be retired...
If only there were a digital asset that had a fixed supply to prevent inflation that nobody could control who could spend what (to avoid unjust debanking) which was highly divisible so that you could spend large or small amounts, and because it's digital it could be spent very rapidly across long distances using the magic of the Internet. And if only it's governance model wasn't subject to the corruption seen in governments and private banks alike.
I bet that thing would be a pretty useful monetary tool, even if it were attacked, as one might expect by all of the government and banks around the world who were trying to cling to the power they have by virtue of having captured the ability to print money and use it when it is most valuable, fresh off the press.
I bet that thing would be a pretty useful monetary tool, even if it were attacked, as one might expect by all of the government and banks around the world who were trying to cling to the power they have by virtue of having captured the ability to print money and use it when it is most valuable, fresh off the press.
> Gold provided pure price appreciation (no yield or dividends).
Who's your alchemist? Get a better one.
Who's your alchemist? Get a better one.
It's tricky because it's unclear if the S&P500 will halve (Market pessimism), or if Gold price will double (currency devaluation)...
I need to see both of them priced in loaves of bread.
I need to see both of them priced in loaves of bread.
If currency devalue, S&P500 would go up since equities will hold value better than cash.
It's way more complex. Technology is driving deflation even for equities as extraction and refinement becomes cheaper.
But the worst is mass migration an the bulge of the world population pyramid entering working age [1]. Labor costs down for corporations and our wages evaporate. Compound with AI and automation.
I think the future is very unpredictable.
[1] https://www.populationpyramid.net/world/2025/
But the worst is mass migration an the bulge of the world population pyramid entering working age [1]. Labor costs down for corporations and our wages evaporate. Compound with AI and automation.
I think the future is very unpredictable.
[1] https://www.populationpyramid.net/world/2025/
I'm not sure how the cycle continues though if we dont have jobs, the companies do not have buyers?
What does this mean? That the valuation of dollar dropped as much as the SP500 growth?
Yes
No. Very much no. It means that gold does not have a stable value, and using it as the yardstick to measure the value of other things just leads to confusion.
I wonder if this was a 2013 article that linked to live updating charts (with data from 2025) since there are Google+ and Twitter buttons at the end, and two 2013 timestamps below those.
I sometimes wonder if we should be measuring money in some other unit besides dollar/etc. to reveal inflation. We could report bank balances and wages that way so the effect of inflation is obvious instead of being a trick to silently steal money off people. But it's tricky because there's no natural measure of inflation. Gold seems like a good idea in a way but I don't understand enough to know.
The issue is that broad money isn't money. It's credit. And measuring credit is like measuring both velocity and position at the same time.
The Fed tried to measure dollar supply globally for decades before giving up as they finally got their heads around how the Eurodollar network works, and they've kept somewhat quiet about the fact that they're just not actually at the center of it.
The Fed tried to measure dollar supply globally for decades before giving up as they finally got their heads around how the Eurodollar network works, and they've kept somewhat quiet about the fact that they're just not actually at the center of it.
This is a very interesting chart but I can't figure out if it takes compounding into account or not.
Yes, these charts keep popping up on my Twitter and it's always difficult to know what they are really measuring.
It’s just s&p 500 index value divided by gold to get a “gold native” number. The compounding represented here would be the growth of the companies that has been “compounded” as a result of their internal investment
It’s ignoring S&P dividends which add a significant amount.
S&P on its own is up 20 fold since 1990
SP500TR Is up 40 fold.
S&P on its own is up 20 fold since 1990
SP500TR Is up 40 fold.
I guess if your purpose of the site is to make yourself feel good about gold they chose the proper index. Agreed if you want to compare the decidedly non-dividending gold as an asset class TR makes sense.
Economic stagnation for over a decade? Aligns with the vibes, IMO.
Gold is just one of many commodities these days, mostly unconnected from most monetary systems for many decades. Treating it as the benchmark of value is really quite arbitrary, and I expect someone could compare the S&P to other random commodities and come up with completely different conclusions...
I'd definitely be curious to see the S&P valued in different commodities over time. With that said, gold certainly feels like a special indicator given its history as a universally recognized store of value.
> history as a universally recognized store of value.
History of what now? Gold is a volatile commodity. It has crashed, many times, often catastrophically, and had bear markets that dwarf anything you see in stocks.. A quick search tells me that inflation-adjusted gold prices dropped like 80% between 1979 and 2000.
And given its value right now, it's probably due for another.
History of what now? Gold is a volatile commodity. It has crashed, many times, often catastrophically, and had bear markets that dwarf anything you see in stocks.. A quick search tells me that inflation-adjusted gold prices dropped like 80% between 1979 and 2000.
And given its value right now, it's probably due for another.
To add some context, gold was actually something backed by the US government during the Bretton Woods era (40s-70s), where 1 ounce of gold was pegged to 35 dollars. This was only possible because the US accumulated so much wealth relative to rest of the world after WWII, so they controlled the majority of the gold supply. After the golden age of Keynesian America ended with stagflation in the 70s, the US government had to stop all of their gold from fleeing the country, so this guarantee had to end. Which leads to the Nixon shock, where the dollar (and all other currencies as well) became free-floating, and we enter a brave new world where humanity hasn't lived before (neo-liberalism).
Given all that, it's easy to see why the value of gold has plummeted during the 70s - 00s. Though I could see two reasons as to why gold prices are rising during the last decade:
- Gold is actually just a part of the asset bubble (in the same group as housing, stocks, and crypto), and investment in it is aided by too much money printed by the US government not being used towards productive ends but towards rampant asset speculation.
- The current era of neo-liberalism is going to end pretty soon, and some goldbugs are rooting for the revival of late 19th-century classical capitalism, where gold was actually the international standard. I think this is very unlikely though, even if the US dollar loses its status with the end of the petrodollar system. My guess is we're going to deal with free-floating currencies for quite some time, especially when wars are going to happen and governments have to print more money to sustain their war efforts. (I think the best monetary system would be neither gold or crypto, but instead something like the Bancor (https://en.wikipedia.org/wiki/Bancor))
Given all that, it's easy to see why the value of gold has plummeted during the 70s - 00s. Though I could see two reasons as to why gold prices are rising during the last decade:
- Gold is actually just a part of the asset bubble (in the same group as housing, stocks, and crypto), and investment in it is aided by too much money printed by the US government not being used towards productive ends but towards rampant asset speculation.
- The current era of neo-liberalism is going to end pretty soon, and some goldbugs are rooting for the revival of late 19th-century classical capitalism, where gold was actually the international standard. I think this is very unlikely though, even if the US dollar loses its status with the end of the petrodollar system. My guess is we're going to deal with free-floating currencies for quite some time, especially when wars are going to happen and governments have to print more money to sustain their war efforts. (I think the best monetary system would be neither gold or crypto, but instead something like the Bancor (https://en.wikipedia.org/wiki/Bancor))
This is one of those bell curve memes. All your text sits in the middle. The Jedi and I are off on the ends screaming "Gold is just a bubble!"
Not really. Gold is not a random commodity. It is historically the primary compact store of value, only recently to meet competition with Bitcoin.
I mean, yeah, but the parallels OP is drawing really kinda feel like the lingering whispers of the “gold standard” crowd rather than anything more substantial.
For the working classes, the peak was the dotcom bubble - everything after that has been repeated speculative bubbles attempting to create explosive growth from nothing of substance, as much a deliberate decision of Capital to weaken the working classes while extracting wealth as it was a desperation gambit by an increasingly stable (but not yet stagnant circa mid-2000s) western hemisphere and its governments. Gold alone isn’t an indicator of this, so much as all asset prices skyrocketing to the moon while worker wages remained relatively flat and precarity increased. Metals, securities, housing, land, all of it has appreciated faster than working wages have kept pace, reflecting a siphoning of that wealth into fewer hands.
Gold just makes the story “neater” to tell to folks lamenting the heyday of Breton Woods.
For the working classes, the peak was the dotcom bubble - everything after that has been repeated speculative bubbles attempting to create explosive growth from nothing of substance, as much a deliberate decision of Capital to weaken the working classes while extracting wealth as it was a desperation gambit by an increasingly stable (but not yet stagnant circa mid-2000s) western hemisphere and its governments. Gold alone isn’t an indicator of this, so much as all asset prices skyrocketing to the moon while worker wages remained relatively flat and precarity increased. Metals, securities, housing, land, all of it has appreciated faster than working wages have kept pace, reflecting a siphoning of that wealth into fewer hands.
Gold just makes the story “neater” to tell to folks lamenting the heyday of Breton Woods.
I’d be interested to see a similar chart for silver.
Looks like Brownian motion to me.
The price of gold pre-1971 was always a fantasy as there was no free market for it, due to the policy rate sitting on it at $35/oz.
The price of gold before 1933 (EO 6102) was also not a terribly good indicator, as the friction of taking physical delivery of it also kept it suppressed in most circumstances, with explosive swings in times of crisis.
Arguably it's even more gamed after 1971 as it's not even used for exchange, and has a ton of rehypothecation and elaborate derivative networks.
Gold's drawback was always its physicality. Arguably its heyday was before the invention of the telegraph, when at least the expectation was that money was going to be slow, and the only way to move it across most distances was physically, unless you had some handy Knights Templar or Hawala network handy.
That we still cling to it despite all of this is a good indicator of just how fucked up fiat is though. Thankfully, we have a better alternative network being built out.
The price of gold before 1933 (EO 6102) was also not a terribly good indicator, as the friction of taking physical delivery of it also kept it suppressed in most circumstances, with explosive swings in times of crisis.
Arguably it's even more gamed after 1971 as it's not even used for exchange, and has a ton of rehypothecation and elaborate derivative networks.
Gold's drawback was always its physicality. Arguably its heyday was before the invention of the telegraph, when at least the expectation was that money was going to be slow, and the only way to move it across most distances was physically, unless you had some handy Knights Templar or Hawala network handy.
That we still cling to it despite all of this is a good indicator of just how fucked up fiat is though. Thankfully, we have a better alternative network being built out.
Now do it compared to the median home value.
Gold has 100x while median homes values have 15-20x since 1971.
S&P 500 Investment (with Dividends Reinvested) Historical data shows that $10,000 invested in the S&P 500 at the start of 1950, with all dividends reinvested, would grow to approximately $3,836,763 by the end of 2025.
Gold provided pure price appreciation (no yield or dividends). The multiplier is about 124.7× ($4,360 ÷ $35), or an annualized return of roughly 6.8% over 75 years.
Ounces purchased in 1950: $10,000 ÷ $35/oz ≈ 285.71 ounces
Current value: 285.71 oz × $4,360/oz ≈ $1,246,700