One of the key ratios for precious metals investors to understand is the Dow to gold ratio. The Dow to gold ratio asks: “How many ounces of gold does it take to purchase one share in each company in the Dow Jones Industrial Average?” The higher the ratio, the stronger Dow stocks are performing relative to gold. The lower the ratio, the stronger gold is performing relative to the Dow.

In other words, the Dow to gold ratio measures the relative worth of mainstream stocks versus gold, the age-old store of wealth.

Presently the ratio stands at 19 to 1, with the Dow at 34160 and gold at $1,800 per ounce. What is coming next for the ratio? Will gold increase or decrease compared to mainstream stocks?

We have strong reason to believe that a significant move lower in the ratio is due ahead. In other words, gold should be gaining value relative to the Dow, and quite soon.

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