The S&P 500 Priced in Gold

Every price is a comparison, often between an asset and a currency. A share quoted at $50 reflects the value of both the share and the dollar, and there is no way to tell from the number alone which of the two has moved. In other words, if that share goes to $100, it could be the share going up in value or it could be the dollar going down.

One way around that is to show the value of assets in terms other than dollars. Divide the S&P 500 by the price of an ounce of gold and you get this chart: how many ounces of gold it takes to buy a share of the index.

012345

1875190019251950197520002025

1.84 ounces of gold as of Jul 2026Robert J. Shiller, US Stock Markets 1871-Present (via datasets/s-and-p-500) · Gold price, monthly since 1833 (World Bank and National Mining Association, via datasets/gold-prices)

Reading the line

The chart starts in 1871 because that is where Shiller's monthly prices begin. For the first sixty years of it the dollar was convertible into gold at a fixed rate, so a comparison to gold and a comparison to the dollar is the same.

1.52 ounces in September 1929, the month before the crash, after a decade in which the index quadrupled against a pegged metal.

0.23 ounces in June 1932. Shares lost roughly 85% of their value in gold terms in under three years, and did not recover the 1929 level until the mid-1950s.

0.16 ounces in January 1980, the lowest reading of the modern era. Gold had gone from $35 an ounce to several hundred in a decade while equities went nowhere.

5.41 ounces in August 2000, the all-time high and a thirtyfold rise from 1980. Gold spent the 1990s unwanted while equities did the opposite.

0.67 ounces in August 2011, after the financial crisis sent gold to its own peak.

The line has been climbing since and sits near 1.84 today — close to where it stood in 1929, and still a long way below 2000. Are we looking at a short-term bump up in the spring and summer of 2026 and the ratio will resume its overall trend downward, or will we see a sustained increase in the ratio from here?

Noting what is missing

Dividends. This is the big one. The index here is a price index, so it counts what the shares are worth and not what they paid you while you held them. Gold pays nothing, so a price-only comparison is not unfair, but it does understate equities by whatever dividends contributed over the period, which over a century and a half is a great deal.

The peaks are averages. Both series are monthly, and a monthly figure smooths away the extremes. January 1980 shows gold near $675 an ounce because that is the month's average; it touched considerably higher intraday.

The gold series is spliced. Figures from 1960 are the World Bank's; before that they come from a historical table. And for the first sixty years of the chart gold was pegged rather than traded, so the line moves only because equities did.

A ratio is not a forecast. That the line sits about where it did in 1929 tells you where it is, not where it goes.

The bottom line

The chart is a way of asking one question: over any stretch you care to pick, did shares in the largest American companies gain on gold, or lose to it?

For the 1930s the answer was lose, catastrophically. For the 1970s, lose again. For the two decades after 1980, gain spectacularly. As with owning any asset, timing is everything.