The SP500 index / AU (spot gold) ratio is just resting above the post Sep-11 low.
A conclusion would be is that stock markets can continue to decline while gold in US$ rallies.
How low can the SP500 go? As low as sub-500 level which could be achieved over the next few years.
How high gold can go? As high as its previous all time high of $US850/oz and ofcource as panic bottoms follow euphoric tops a look at the US$1,000/oz could be possible.
In the meantime, gold has a lot of work to do in the US$330-$340/oz area and at $370-380 where I dear beloved RBA sold its gold.
Gold mining shares may not be as lucky as gold itself.
Though I can see gold mining shares outperforming gold in the near term, if we see a 10% outperformance then I would commence reducing exposure to gold mining shares because it is best to forgo the last 10% outperformance blow-off rally than to be got long in an underperforming market.
YES! you guessed it. Gold mining shares are vastly overpriced against the yellow metal.