Gold hasn’t been such a terrific hedge of late against the turmoil from the coronavirus pandemic that has upended financial markets.
Over the last month, gold futures GC00, -0.990% have retreated by 5%. While that’s a long way better than the 28% decline in the S&P 500 SPX, -4.424% , it trails the performance of other assets that are perceived as safe, such as government bonds. The iShares 7-10 Year Treasury Bond ETF IEF, 0.119% , for instance, is up 7% over the last four weeks.
But where gold is looking lustrous is relative to silver SI00, -2.001% .
According to Marshall Gittler, head of investment research at BDSwiss, the ratio of gold to silver is the highest it’s been for 5,120 years.
Yes there’s data back into Pharaoh Menes’ time in ancient Egypt, when the ratio was a more modest 2.5, and it was 6 in King Hammurabi’s day in Babylon.
On Monday the ratio reached nearly 124. On Tuesday morning, the ratio slipped to 119.