Why the heck is even GOLD going down?!

[murray t turtle]

Depends on where you start from. This is $SPX/Spot Gold ratio chart. Held up good from Jan 4th, 2022 high, not so good from March 23, 2020 low:-
View attachment 296338

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GREAT gold uptrend in 2009, 2019;
+pays no dividends, has no earnings\but gold buyer gets to pay storage+ pay insurance.
IF we compared gold + SPY benchmark fundamentals+ trading volume\ many would '' wonder why any would ever buy gold??''
Good gold uptrend from1930s

 

[TrAndy2022]

Gold is correlated with AUDUSD, so when the market goes down, it also means in short term that to some extent AUDUSD and Gold goes lower too. All markets are interconnected to each other by the way. So this is nothing special.

 

[Overnight]

Inflation hedge? Hedge against economy tanking? Any of that stuff? Apparently not, at least not anymore!!!

*smashes head against wall*

I have got to think that it is mainly because of the 2y yield being above 4% Why set your cash in zero-yield gold when the 2y guarantees 4% risk-free?

 

[SunTrader]

Gold is correlated with AUDUSD, so when the market goes down, it also means in short term that to some extent AUDUSD and Gold goes lower too. All markets are interconnected to each other by the way. So this is nothing special.

Maybe AUDUSD is correlated with ASX but not with $SPX. Correlation indicator on bottom of chart has readings ranging between -0.08 to +0.17. Also ZigZag shows some similar swings and some not. Overall most world indices do move together in a prevailing direction, but individual economies are at different stages in the boom/bust cycle so march to their own drummer mostly.

 

[TrAndy2022]

Maybe AUDUSD is correlated with ASX but not with $SPX. Correlation indicator on bottom of chart has readings ranging between -0.08 to +0.17. Also ZigZag shows some similar swings and some not. Overall most world indices do move together in a prevailing direction, but individual economies are at different stages in the boom/bust cycle so march to their own drummer mostly.
View attachment 296358

Not on that scale of course. You need to go to the minute or hourly time frame. Then you see the correlation if you put them on same chart as overlay.

 

[misterkel]

The dollar is just getting weak slower than other currencies

Different time frame. Dollar can strengthen quite a bit in short term as debtors scramble for cash to avoid bankruptcy. It's unclear how long such a situation goes on, of course, but there are a LOT of factors influencing the value of all currencies and the USD has the most pushes and pulls by far.
So when one major factor (debt overhang) gets triggered, it affects the dollar for a strong counter-trend move.
Downside will resume in 10-9-8...

 

[misterkel]

%%
GREAT gold uptrend in 2009, 2019;
+pays no dividends, has no earnings\but gold buyer gets to pay storage+ pay insurance.
IF we compared gold + SPY benchmark fundamentals+ trading volume\ many would '' wonder why any would ever buy gold??''
Good gold uptrend from1930s

Gold was the quickest to recover in 2008. But also, counterparty risk becomes a bigger and bigger deal as trust vaporizes from the system.
And imo it is vanishing FAST.

 

[TrAndy2022]

The war and energy crises with high inflation is still not over. In addition Lagarde is a true Dove. So yes, USD should get stronger in my opinion for longer time period. In every crisis it is the US Dollar which is the safe haven of all.

 

[TrAndy2022]

Do not forget Gold is a very thin market to Oil (in the commodity markets spectrum). So there can be some erratic moves of course.

 

[Specterx]

Depends on where you start from. This is $SPX/Spot Gold ratio chart. Held up good from Jan 4th, 2022 high, not so good from March 23, 2020 low:-

What I mean by "holding up well" is that 10yr real yields have now round-tripped completely back to 2018 levels, when gold was stuck around 1250, but the current gold price is still way up at 1650. That might of course change quickly with gold catching down to yields.