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Tuesday, February 08, 2011

Dow-Gold Price Ratio at Strong Resistance

The Dow-gold ratio is right at its long-term, down-trending resistance level. The Dow-gold ratio is defined as the ratio of the price of the Dow Jones Industrial Average (DJIA) divided by the price of gold.

Charts of the Dow-gold ratio price ratio and the price of gold plus the rest of my Seeking Alpha article at:
At 8.96, the DJIA, measured in how many ounces of gold it takes to buy the 30-stock Dow, is up 27.5% from its 17-year March 6, 2009 low of 7.03. But, as the chart shows, the ratio has been in a fairly flat, two-year trading range as it moved from long-term support to resistance.

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