It has to be great because it does mention the issue I posted the other day. Performance Of Gold During Recession. :D
Chris wrote
- While the inverse correlation of gold to the stock markets was cited above as a bullish support for gold, it can also work against gold. If the stock market bottoms this year there is a good chance that it will be associated with a top in gold, not necessarily “THE” top in gold for this cycle but “A” top. This relationship can be seen by comparing gold with the S&P 500 in the 1973 and 1981 recessions during the prior secular bull market in gold. The figure below normalizes gold to 100 at the onset of the recession and the x-axis is the duration in months before and after the recessions began. What is interesting to note is that gold is following a similar path to what was seen in the recessions highlighted below. If gold follows the 1973 path then it should be peaking in the next month or so at a new high before undergoing a sizable correction, which is certainly possible given gold’s close proximity to its former high. If gold follows the 1981 recessionary path, then we could see strength in gold for another six months before a correction is seen. At either rate, both recessions witnessed a peak in gold anywhere from 13-19 months after the recession began, pointing to a top of intermediate nature in gold’s future in the next six months.
Moolah..nowadays alot of banks are offering investors a "chance" to invest in gold.
ReplyDeleteWhat i mean a "chance" is that it is highly they banks will make a handsome profit just by buying/selling to the customers aka by being the middle man.
The spreads from them is kinda wide if compared to an buying/selling "GLD" on Wall Street.
Hi Kris,
ReplyDeleteYes they are.
The main question one should ask themselves is why are they buying gold?
Why?
And much does one factor in the fact that the GOLD investments sold here are based on USD?
Ever wonder why this factor is important?
:)
I guess they are expecting the USD movement to be the inverse of GOLD's movement.
ReplyDeleteNevertheless, I still personally think GOLD is a very volatile commodity. Not sure whether for the average investor it is a good idea to hold long term.
Perhaps property is a better and safer choice. :P