Gold closed at over $1000 / ounce as stock prices continued their slide. While stocks have dropped about 15% so far this year and treasury bonds have been about flat, gold has risen 13% year to date and indications are that it will continue this trend.

In late January 2009, the S&P 500 index was actually lower (at $845) than the price of gold (at $924). This is a rare event, not seen since 1973, and is a very bullish sign for gold prices. We’ve seen the price of gold gain steadily since late last year, and having crossed the psychologically significant $1000/ounce mark, there is historical evidence that suggests gold will significantly outperform the general stock market for the near future.

There is a gold trust that trades on the stock market under the symbol GLD, and you can see that its performance has tracked the rise of the metal as the S&P index has suffered. See the SPX and GLD charts, courtesy of Yahoo, and the historical gold price chart, courtesy of the-privateer.

As I’ve mentioned before, do not put your entire portfolio or even the bulk of it into one investment, but this may be a time when gold is a diversification that may help balance your portfolio and protect it against the damage we are seeing from the current crisis in the stock markets.