Bespoke Investment Group - Think BIG - Another Lower High in Gold?

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Aug032010

Another Lower High in Gold?

Tuesday, August 3, 2010 at 02:43PM

Ever since stocks made a short-term low back in late June/early July, gold hasn't been able to get out of its own way. After several months of higher highs and higher lows, the commodity has now been making a series of lower highs and lower lows.

What makes the declines in gold even more puzzling is that the dollar has also been extremely weak. In fact, for much of this year, the relationship between gold and the dollar has been defying logic. Normally the two assets are inversely correlated, meaning that when the dollar is weak gold rallies, and vice versa when the dollar rallies. However, over the last six months the two assets have been more positively correlated (moving in the same direction) than at any other time in at least ten years.

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Reader Comments (4)

Yeah... gold's weak. Guess what? It's the summer. And starting next month India's going to be buying scads of it again.

August 3, 2010 |

In the last week or so it's moving in lock step with the DJIA, I watch it all day. The up volume has been extremely weak and I was quite suprised at the rally after our market had that China news digested and GLD traded sideways all day. I'm looking for a hard roll over after the last attempt by the SPX to break out.. I too think it's gonna take gold down with it. All the people are on board and todays very unusual rally made them comfortable again. It needs to be shaken.

August 4, 2010 |

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August 19, 2010 |

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