The ratio of the S&P 500 index to gold has fallen to its lowest level since the pandemic. In March 2025 the mean ratio stood at roughly 1.9, meaning it would take about 1.9 ounces of gold to purchase the index. That represents a notable decline from 2.3 in December 2024 and from the cyclical peak of 2.5 seen in February 2024. Aakash Doshi, global head of gold strategy at State Street Global Advisors, says the move reflects investors seeking safe-haven assets amid heightened economic and geopolitical uncertainty, although it is not a definitive signal of recession.
Gold has markedly outperformed U.S. equities in 2025. April gold futures settled at $3,025.90 an ounce on Tuesday, extending a year-to-date gain while the S&P 500 has moved lower. The three-month rate spread between gold and stocks has widened to its largest gap in more than two years. Several factors are contributing to gold’s rally above $3,000: renewed retail demand in China as the country continues its post-pandemic recovery, continued purchases from emerging-market central banks, and a significant increase in gold exchange-traded fund (ETF) inflows. Those ETF flows represent the first net increase since 2020, reversing a roughly 3.5-year trend of Western investor selling.
Doshi cautions that it is still too early to determine whether current positioning represents a temporary shift or a longer-term structural change. Nevertheless, weakening consumer sentiment — now at a four-year low — indicates that many investors are actively looking for hedges against both economic and geopolitical risks. The convergence of higher gold demand, shifting investor behavior, and central bank activity has pushed gold to record levels and narrowed the relative valuation of stocks versus the precious metal.
As the market recalibrates, the S&P-to-gold ratio will remain a closely watched gauge for investors weighing risk exposure and portfolio diversification. A persistently low ratio can reflect growing preference for safe-haven assets, while a rebound could signal renewed confidence in equities. For now, the trend underscores how macroeconomic signals and shifts in investor sentiment can rapidly alter the balance between financial assets and commodities like gold.