long term dow:gold ratio ~ 9:1
The long term average ...once equilibrium settles in both markets is around 9:1. IE. If you think the DJIA will be in the range 7000-8000 then gold will eventually settle in the range $770 - $880......
Which sounds very feasable once gold corrects upwards to account for the huge US deficit and the subsequent fall in the US$... and of course the US is only a wisker away from having negative real interest rates... which is good for gold. The last time the US had neg real interest rates was in the aerly 1980's and the POG traced $700+ for over 12 months!
