Very simply, when this ratio goes up, stocks outperform gold. When the ratio goes down, gold outperforms stocks.
If you held stocks from 1980 to 1999, you did really well compared to gold. But, beyond that, gold hasn’t looked like that bad of an investment. Even during the huge rally in stocks over the last ten years, gold hasn’t even underperformed by all that much. That’s surprising, given that gold just sits there and doesn’t produce cash flows or dividends.
In general though, the real message here is that there is more to investing than just stocks. Investing across different asset classes could be very advantageous for a portfolio - especially if you catch the right timing!