On Wednesday gold futures enjoyed another up day, lifting the price of the precious metal to a five-week high on the back of a huge selloff on equity markets after surprisingly weak economic data from the US.

Some safe haven buying prompted by wars in the Middle-East and a spreading Ebola pandemic also attracted buyers.

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But it's mainly falling bond yields making gold which does not pay a coupon more attractive and weakness on stock markets that have pushed the metal 4. This year chart of the blue-chip Dow Jones Industrial index from Macrotrends tracks how many ounces of gold it would take to buy the Dow over any given month.

What Dow 20, looks like in inflation-adjusted terms | R Street Institute | R Street

Previous cycle lows have been 1. On Wednesday the Dow-Gold ratio was at The price of gold and the oil price usually rise in tandem because rising oil prices pushes up inflation and increase demand for gold as a hedge.

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Since the average ratio — how many barrels of oil can be bought with one ounce of gold — is While gold looked grossly undervalued for most of the year with the ratio pegged at under 12, the relationship has now returned to historical norms as US crude plunges to multi-year lows in A binary options brokers is the best in usa. While gold and the dollar usually moves in opposite directions gold recent strength has been into the teeth of a stronger dollar.

Both large investors and retail buyers have been using the rally as an opportunity to exit the market.

The third quarter was the sixth quarter in a row holdings in global exchange traded funds backed by physical gold were reduced and September was the worst month for ETF funds since December The selling continued into October.

Overall gold bullion holdings are now at five year lows and a whopping tonnes below the dow jones all time high adjusted for inflation 2, tonnes or 93 million ounces reached in December Sign Up for the Gold Digest.

Gold price vs Dow Jones shows metal still cheap. PeopleMine Facebook LinkedIn Twitter Email Print. Gold price hits 5-week high Wednesday as stocks drop but gold's gains could've been greater if not for strong dollar On Wednesday gold futures enjoyed another up day, lifting the price of the precious metal to a five-week high on the back of a huge selloff on equity markets after surprisingly weak economic data from the US. The historic relationship between crude oil and the gold price also appears to have broken down.

Gold's gains may have been greater if not for the rising dollar as this trader explains. Despite the strong bounce of the bottom, not everyone is back on board. Like Us on Facebook. Sign up for our daily newsletter Sign Up. Reaching Out About Us Advertise Contact Submissions Terms of Use. Sign Up for a Digest Mining News Gold News Suppliers and Equipment Coal News Copper News All Digests.