GOLD BREAKS OUT AGAINST THE S&P 500: The 12-Year Base, $5,000+, The Dow to Gold Ratio Collapse, The Great Rotation, The 1970s Parallel, and Why This Trend Is Not The Top!
Two years ago, Gold executed its most significant breakout in half a century. Months ago, silver shattered a 45-year-long base in what was the second most powerful breakout in modern history. It has now surpassed $5,000 for the first time in history. Congratulations to the few who understood what was happening.
And yet, the financial media remains fixated on the nominal highs of the Dow Jones Industrial Average, celebrating its ascent above 49,000. They are cheering for a ship that is taking on water, blind to the fact that the very yardstick they use to measure wealth is failing.
Last week, another earth-shattering event occurred, one that will not be reported on the front page of the Wall Street Journal or discussed on CNBC. Gold, the ancient and ultimate measure of value, broke out of a 12-year-long base against the S&P 500.
H/T Jordan Roy-Byrne For Chart
This is not just another chart pattern; it is a tectonic shift in the financial landscape. It signals the beginning of a great rotation that many have been speaking about for quite some time, a massive and accelerating movement of capital away from conventional financial assets and into the timeless safety of hard money.
Some are calling what is happening a “blip” or even a “bubble” in precious metals. Those that do, do not understand history. While the world is mesmerized by the illusion of stock market wealth, the real story is one of profound devaluation of the base currency.
Priced in gold, the Dow has fallen 77% since 1999. Read that again. 77%! The trend is undeniable and it is accelerating, just look at the chart. We are witnessing a historic wealth transfer, a repricing of assets that will have profound consequences for every investor.
The question is not whether it will happen, or if it is happening, but whether we understand it has happened and will continue to happen and if we are positioned for it.
- You need to understand Gold just broke out of a 12-year base against the S&P 500, signaling a historic rotation of capital out of stocks and into hard assets.
- You need to understand that priced in gold, the Dow Jones Industrial Average has collapsed by an astonishing 77% since 1999.
- You need to understand the Dow-to-Gold ratio is plummeting towards its historic crisis lows of 1:1 or 2:1.
- You need to understand gold has also broken out against the Nasdaq 100, the engine of the last decade’s bull market.
- You need to understand Morgan Stanley, one of the world’s largest banks, is now advising clients to abandon the traditional 60/40 portfolio and move 20% into gold, creating massive capital flows of big money.
- You need to understand the macro drivers for this great rotation are intensifying, not abating.
- And you need to understand this trend will not stop until the underlying conditions change. It’s a scientific law that I will share below.
Gold has broken out vs. the S&P 500 from a 12-Year base, the Dow to Gold ratio is collapsing, gold has shot past $5,000, the great rotation into hard assets is underway, and this trend will not top until something big happens to change the trend!
Let’s Dig Into The Following:- The DOW’s 77% collapse vs. sound money is really highlighting the illusion of wealth. The mainstream financial media is a master of illusion. It directs our attention to the glittering lights of nominal new highs while picking our pocket in the darkness of devaluation. The headlines continue to celebrate the Dow Jones Industrial Average closing above 49,000. It is a meaningless milestone, a number devoid of any real-world context, because the unit in which it is measured; the U.S. dollar, is in a state of terminal decline. Why our traditional stock portfolios, which we have been told is in a perpetual bull market, have lost over three-quarters of its real value when measured in sound money!
- Gold breaks out against the S&P 500, highlighting the great rotation is underway. The collapse of the Dow-to-Gold ratio is the headline, but the underlying story is the more broad-based rotation of capital out of the general stock market and into gold. The most powerful confirmation of this trend came last week, when the Gold-to-S&P 500 ratio ($GOLD:$SPX) broke out from a massive 12-year-long base.
The ratio has been grinding higher, with one notable pullback in the first half of last year. Now, it has decisively cleared the critical resistance level that has capped its advance for over a decade. Why this signals that the flow of capital away from conventional stocks and into gold is not just beginning, it is accelerating!
- The tech bubble is deflating as gold breaks out against the NASDAQ. Even more significant is gold’s breakout against the Nasdaq 100, the high-flying technology index that has been the undisputed leader of the market for the past decade.
The tech giants; Apple, Microsoft, Nvidia, etc. have been the darlings of Wall Street, their valuations soaring to astronomical levels. But here too, the tide is turning. Gold has now broken out from a 6-year-long base against the Nasdaq 100 ETF (QQQ). Why we have been conditioned to believe that the only path to wealth is through a handful of mega-cap technology companies and that era is now over!
- The macro drivers are an unstoppable force that are now beginning to pull in institutional investors. What is driving this historic rotation, is the collision of powerful, long-term trends that have been building for years and are now reaching a critical mass, all at the same time. The underlying structural conditions that have created this trend have not changed; they are intensifying and beginning to create a stampede. Why the institutional world is really only now beginning to wake up to this new reality and will propel this next leg!
- Echoes of the 1970s are everywhere as history rhymes. For those who doubt the magnitude of the shift that is underway, we need only look to history. The current environment bears an uncanny resemblance to the 1970s, the last time the world experienced a fundamental reset of the monetary system and a secular bull market in gold and silver. The parallels are not just similar; they are uncannily similar.
Why today, we face a similar energy crisis, born not of an embargo, but of a decade of underinvestment in fossil fuels, misguided green energy policies, and escalating geopolitical conflict, combined with persistent inflation, and the breakdown in the current global monetary regime!
- And incredibly, the psychology of denial has led so few to listen….up till now. With such a powerful and undeniable confluence of technical and fundamental evidence, the logical question is: why is this not the biggest story in finance? Why is the investment world, by and large, still asleep at the wheel? The answer lies deep in the realm of human psychology, cognitive bias, and the pervasive power of a narrative that has been carefully constructed over decades. Why the reality is that out of the billions of investors around the world, the percentage who have any meaningful allocation to precious metals is still vanishingly small, that the real bubble is not in gold; it is in the blind faith that the current paper-based system can last forever!
So, let’s go…...
Continue reading this post for free in the Substack app
Claim my free post
Or upgrade your subscription. Upgrade to paid
© 2026 Metals and Miners, LLC.
Unsubscribe
 
| |
|
