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Wednesday, September 10, 2014
In the INTEREST of GOLD
So my last post was about the correlation of crude oil and gold, war and location. Within all trades many correlations exist, its good to know and understand them, so you then can position yourself correctly. One of these correlations is the rise and fall of interest rates and the rise and fall of gold, since gold has no interest, it dips when interest rates rise and peaks as the interest rates fall, so that would indicate that you buy gold when rates are low and sell when rates are high. Because this is an accepted correlation, the central banks are watching the market for indication showing prolonged inflation, and have policies that could reverse this correlation. In fact the we saw this opposite reaction when rates rose the price of gold peaked in Europe and in India in 2011, this was an exception in decades of historical data. Many other factors can influence the bullion market, fear seems to move it the most, and that no one can predict.
Holding short at 1309.88 current price 1240.00 gain of 4.6%