I’ve said for a while now that due to gold becoming the world’s latest sure thing investment, it has become a very crowded momentum trade. However, this chart from Zero Hedge (guest post by Brandon Ferro, Managing Member of Hevea Partners) is one of the few pro-gold arguments, aside from almost certain devaluation of fiat currencies, that makes a substantially bullish case for gold for the short to medium term.

[Click to enlarge graph]

Like most things financial, what goes up must come down, so if the S&P 500 to Gold Ratio continues to fall, that would imply the trend will reverse at some point in the future. It’s anyone’s guess when the reversal would take place, but it supports the unpopular idea (depending upon which gold camp you reside) that, at sometime in the medium to long term future, that gold prices could be headed lower and stocks could be headed higher.