the dow/gold ratio aside - the course of the overall equity market doesnt have a direct bearing on gold price. gold often falls when the dow is falling hard
just have a look at usd gold and dow jones 2002-2007. in fact plenty of times both rise together - if inflation is fairly close to or higher than gdp.
its when inflation is significantly below gdp that gold falls and stock market roars - cos economic groth is strong but real interest rates rise (so you get better returns from companies or owning property or inflation linked bonds)
the big 'unseen' factor for gold atm is that the US money market is short of dollars. as that blog outlines - thats driving the fomc to push out more reserves so the banks have sufficient funds to meet their liquidity requirements
the more money they push out the higher gold is likely to go - and because of the shortage more buyers are buying US debt - which is pushing down the yield curve - which also increases gold's holding power because it keeps real rates low
that will likely only change if US gdp growth grows sufficient that savings grow so baks need less from FOMC. this is where the high consumption of US consumers hurts causes a two-edged effect - it props up gdp but weakens savings. if manufacturing was doing well gdp would grow faster because manufacturing has many second order effects - especially if all components and value add layers are fromw ithin the US
thats how the US used to turn in 5-8% gdp growth
but retail goods sold in US nowadays ofyten have only one off benefiot to the seller - but the good often being produced overseas - means the majority of the benefit doesnt necessarily flow into the US
but likewise thats allowed them to build out their services sectors exp all the tech cos - but the profit benefits of those go to a very small number of people
