CHART: Gold now cheapest vs stocks since January 2008
The price of gold fell 3% last week and continued to drift lower on Monday, hitting fresh four-month lows at $1,243 an ounce.
Gold remains some 4% to the upside for 2014 but is down $135 from highs reached mid-March as the rally on the back of safe haven demand and bargain hunting loses steam.
US stock markets however have been on an incredible winning streak.
In a new note, the research team at ETF Securities points out that the gold to S&P 500 ratio has fallen close to its lowest level since early 2008.
The institutional investment advisers based in London says this begs the question: "Is gold a cheap insurance option right now?"
"The VIX equity volatility index declined to near its lowest level since 2007. Meanwhile the S&P 500 extended its longest winning streak above its 200-day moving average since 1998, helping drive the gold/S&P 500 ratio to 0.65, near the lowest level since January of 2008.
"In our view it is difficult to believe volatility can remain this low indefinitely. Therefore now may be a good time for investors to consider looking at gold as insurance against a potential rise in volatility."