The S&P Is Cracking Against Gold – And That Could Light a Fire Under the Yellow Metal
The S&P Is Cracking Against Gold: Why It Matters Now
If you’ve been watching the markets lately—and I mean really watching, not just reading headlines—you’ll know something’s brewing under the surface. Stocks have been on a sugar high, floating up on cheap money and blind faith. But behind the curtain, something more telling is happening: gold is quietly positioning itself to steal the show.
Bloomberg’s Mike McGlone, a guy I’ve followed for years, just dropped a warning that most people are going to miss—until it’s too late. He’s looking at the S&P 500 compared to gold, and he says we’re sitting on a critical support level. If that ratio breaks down, gold could explode higher, and stocks could start a serious slide.
Let me break it down for you in plain English.
The Warning Signal: S&P/Gold Ratio Near Collapse
The S&P/gold ratio measures how many ounces of gold it takes to buy one unit of the S&P 500. Right now, it’s sitting around 1.66—the lowest since the panic of March 2020. That was COVID crash territory, folks.
Back then, the world was falling apart, and gold did what it always does when trust in paper starts to collapse—it surged. Fast forward to today, and we’ve got a market running on fumes again. The S&P has climbed 16% this year, sure, but gold? It’s up 60%. And that’s not a typo.
As McGlone puts it, this isn’t your usual "stocks up, gold down" story. In fact, he’s saying gold could keep outrunning stocks even if volatility stays low—which makes this all the more alarming. We’re in the calm before the storm.
Market Volatility Is Hiding the Real Risk
You’ve probably heard about the VIX, the so-called “fear gauge.” It’s still sitting below 18, meaning investors are lulled into thinking everything is fine. But McGlone points out something I’ve seen time and again: volatility always mean reverts. In other words, calm never lasts.
He’s especially concerned because we’ve never seen gold rocket like this while volatility stays this low. That’s like seeing a pressure cooker whistle with no steam—it’s unnatural. And when the VIX finally pops, gold could blow right through the roof.
Here’s the kicker: stocks are overvalued relative to GDP and global equity indexes, not just gold. The S&P is trading at over twice the U.S. GDP, the highest it’s been in a century. Think about that. In the real world, when your car is worth twice what it should be, you sell before it breaks down. But Wall Street? They just keep buying and hoping the engine holds.
The Smart Money Is Ditching Treasuries—and Grabbing Gold
Once upon a time, people ran to U.S. Treasuries when they got nervous. Not anymore. With our national debt climbing past $35 trillion and the Fed printing money like it’s Monopoly night, Treasuries are looking about as stable as a house of cards in a hurricane.
So where are smart investors going? Straight to gold.
They’re not buying it to get rich quick. They’re buying it to protect themselves from the fallout they know is coming—whether that’s from a collapsing S&P, out-of-control inflation, or the next wave of digital surveillance through FedNow and central bank digital currencies (CBDCs).
Don’t Wait for the Crash to Wake Up
If you’ve been sitting on the fence about gold and silver, this is your wake-up call. You don’t buy fire insurance after your house burns down. You buy it when things are quiet—like right now.
We’ve reached a point where even mainstream analysts like McGlone are sounding the alarm. That’s rare. Most of the time, these guys are trained to tell you everything’s fine. When someone on Bloomberg is warning about a breakdown in the S&P/gold ratio, you better believe it’s time to pay attention.
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Bottom Line:
The S&P is teetering. Gold is surging. Volatility is too quiet. This isn’t just noise—it’s a signal. Ignore it at your own risk.
Stay sharp out there,
– Frank Balm
