Lately the stock market has been on a fairly wild ride of ups and downs. Some people may be thinking that they don't have the stomach for that rollercoaster and choose instead to put their money into gold. However gold prices can be just as volatile as the stock market.
To compare volatility I decided to compare the monthly high and low prices in 2011 for both gold and the Dow. I grabbed historical prices for the Dow Jones for 2011 on a monthly basis. I then go the monthly highs and lows for the spot gold price off the Kitco website.
First the Dow:
| HI | LOW | DIFF | |
| January | 12,072 | 11,546 | 5% |
| February | 12,418 | 11,893 | 4% |
| March | 12,423 | 11,548 | 8% |
| April | 12,886 | 12,094 | 7% |
| May | 12,928 | 12,272 | 5% |
| June | 12,569 | 11,822 | 6% |
| July | 12,794 | 12,044 | 6% |
| August | 12,321 | 10,589 | 16% |
| September | 11,733 | 10,572 | 11% |
| October | 12,303 | 10,362 | 19% |
| November | 12,212 | 11,193 | 9% |
| December | 12,357 | 11,728 | 5% |
The average difference between high and low per month was 8.5%. In October there was a 19% range between the high and low trading values of the Dow. February had the smallest range between high and low at only 4% difference.
Here is the data for the gold prices:
| HI | LOW | DIFF | |
| January | 1388 | 1319 | 5% |
| February | 1411 | 1328 | 6% |
| March | 1447 | 1400 | 3% |
| April | 1535 | 1418 | 8% |
| May | 1541 | 1478 | 4% |
| June | 1552 | 1498 | 4% |
| July | 1628 | 1483 | 10% |
| August | 1877 | 1623 | 16% |
| September | 1895 | 1598 | 19% |
| October | 1741 | 1617 | 8% |
| November | 1795 | 1681 | 7% |
| December | 1752 | 1531 | 14% |
The average difference between high and low price for spot gold was 8.7%. March had the smallest difference between high and low at only $47 or 3% difference from $1400 to $1447. September had the highest variation and prices ranged from $1598 to $1895 in that month which is about 19% difference.
Comparing these values you can see that the volatility in prices between spot gold and the Dow were actually quite similar in 2011.
Lets take one more look at the data. Here is a graph showing the monthly highs and lows of gold and the Dow plotted. Gold price is on the left axis in dollars and the Dow value is on the right axis.
Viewing it visually you can also see the similar amount of volatility between gold prices and stock prices over the 2011 year.
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