Gold-to-S&P Ratio Hits Pandemic-Era Low: Warning Sign or Market Shift?

The ratio between the S&P 500 index and gold has fallen to its lowest level since the pandemic, with March 2025 showing a mean ratio of about 1.9 times (meaning how many ounces of gold it would take to buy the index). This marks a significant drop from 2.3 times in December 2024 and the cyclical peak of 2.5 times in February 2024. According to Aakash Doshi, global head of gold strategy at State Street Global Advisors, this trend signals investors seeking safe-haven assets amid economic and geopolitical uncertainties, though it’s not definitively a recession indicator.

Gold has substantially outperformed U.S. stocks in 2025, with April gold futures settling at $3,025.90 an ounce on Tuesday, reflecting a year-to-date increase while the S&P 500 has declined. The three-month rate spread between gold and stocks is at its widest gap in over two years. Multiple factors are driving gold’s rally to record levels above $3,000, including China’s post-pandemic recovery in retail gold demand, ongoing purchases by emerging market central banks, and most significantly, a surge in gold ETF investments—the first increase since 2020 as Western investors reverse a 3.5-year selling trend. While Doshi notes it’s too early to tell if this is a temporary positioning shift or a structural trend, weakening consumer sentiment (now at a four-year low) suggests investors are actively seeking hedges against economic and geopolitical risks.