So while we don't believe that the record high gold / XAU ratio can be taken entirely at face value, there's no
question that it is elevated even on a cyclical basis (that is, even allowing for a gradual structural increase over
time), and there's no
question in the data that cyclically elevated gold / XAU ratios have been
associated with strong subsequent gains
in the XAU index over a 3 - 4 year
period on average, though certainly not without risk or volatility.