friday after market comments, page-4

Hi Volataire,

Mahendra may be right - but I don't think so.

However, Gold in US$ can drop and still go up in AUD. We may be coming to a time (well, I think it is already with us) where gold in US$ will continue rising and the Ozzie Dollar will drop. Then Gold in Ozzie Dollars gets a double dose of whooshka.

I've been long Gold.ETF (ozzie dollars) from about $113. Today it finished at $129.45. It is as much a play on the ozzie Dollar as a play on Gold.

Gold (Ozzie Dollars) has a negative correlation with XJO of -0.9 over the past two years. Just about as close to perfect as you can get.

So - Gold in Ozzie Dollars acts as a hedge against the Australian market - if you don't want to sell shares (for tax reasons) and aren't comfortable with options or other derivatives.

Pardon the long discussion on Gold in the XJO thread. But I do think it has a certain relevance. The Gold(AUD)/XAO ratio gave a sell signal for the XAO towards the end of October, and conversely, a buy signal for Gold (AUD). That signal remains current and getting stronger.

Cheers
Red