Stocks v. Gold
While equity valuations may appear appropriate versus the 10-yr Treasury yield of 1.20%, prices relative to gold are at recent highs. The ratio of the S&P 500 to Gold is nearly 2.5. Another way of saying this through a more tangible lens is that it now requires 2.5 ounces of gold to buy one unit of S&P. Less than one ounce was needed ten years ago.
Notice the ratio approached the 2.5 level back in 2018. This may not necessarily be a ceiling for the ratio. Equities enjoy the benefit of cash flows, rising economy, and even inflation can be captured through higher product prices. Gold can be an inflation hedge but may be less attractive when rates rise; the cost of carry increases.
One final caveat; the S&P/gold ratio exceeded 5.0 during much of 2000 at the height of the Dot-com bubble. On the other hand, maybe we shouldn't completely ignore this ratio. More in which to marinate.