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Ece411
Who knows why? I don't. All I know is what I see. It seems that - for now - there's not an inverse relationship between falling equities and gold stocks (unless perhaps the POG rises dramatically, which it isn't, not now)...and I always thought there was (history show us that). It's been suggested that the relationship might be more closely inversely correlated with the USD Index (DXY).
But it's also pretty static...admittedly bouncing off support...but not doing anything overly spectacular...but maybe that's enough?
DXY - DAILY (R/Time)
In the meantime, the major US gold stocks index (HUI) is deteriorating as I write this Post....I see another major smackdown for ASX golds Thursday....the local index (XGD) seems to very, very closely follow the US HUI index (I am not happy).
Perhaps it's just a simple correction, after a big run up? And why not? But this does seem to disprove the inverse relationship of falling equities and gold stocks....at least for now.
Finally...the various US Econ Releases which I posted here tonight were not also not good for golds i.e. as the US economy descends into recession (if not already there), it's not helping gold stocks, as some have indicated ( collapsing economy not necessarily good for gold, as suggested by many here, who think bad news is good for gold, culminating in another epic equities crash / collapse, end of the world etc....).
On the other hand - three hands now - maybe it's just "transient", a word much beloved by the Fed
.
In the meantime us gold longs are losing thousands every day, despite falling equities, corporate earnings disappointments, and recessionary macroeconomic data (in Oz too...why else would RBA have cut?).
I reckon people here need to re-think these relationships. I remain very long gold stocks, but also very confused. One can only hope it's as simple as profit taking, and indeed, transient. Possibly even a buying opportunity? But hope is not a strategy, and, as they say, "don't fight the tape" (or the Fed) - both are true.
