Image Credit: Chart of the Day
Being a chartporn aficionado, it’s hard to not to look at such a chart and wonder if precious metals and real estate markets from the late 1970s/early 1980s will do an encore.
Real estate still has a long way to fall, in my opinion as well as many others who follow real estate on a daily basis, but the momentum in gold is no where near played out. That’s a nice way of saying this trend isn’t going to be over anytime soon, and a dip into the double digits for the home prices to gold ratio is becoming more and more likely.
However, trends change. When one asset becomes cheap enough, and another asset becomes too expensive, investors have this nasty little tendency to cash out of one and move into another. Rinse, wash, repeat.
Note: the home to gold ratio was ~25 ticks higher just 10 months ago.