The graph below compares the first 6 months of gold performance against the graph provided earlier in the year. It appears to be a close match of what occurred with gold values (see purple lines in both graphs).
Moving forward, while Gold is currently fluctuating, it would not be wise to assume that because it has been down-trending for a few months, that it is on a down trend that will continue much longer. Gold, unlike a company, has a value based on both "crisis events" around the world and has close ties with interest rates and values of world currencies. As a currency is debased by a government printing more money, gold values increase (or in effect stay the same) against that currency. As a world currency increases in value by strict governmental management, gold values decrease against that currency.
As noted in an earlier post, the gold charts are still in "BETA".
April 15, 2013 -- Gold on a slide or stabilizing?
This past week has seen sharp decreases in the price of gold which correlates with the decline shown in the Gold Delta Core/Transient (see graphs below). As noted in the write-up in February, there may be stabilization from this period thru the summer with bounces into both risk and yield. As noted previously, the end of the summer sees a rise into yield and this begs the question whether the FED will shift direction in their current policies but, it's still too early to gauge the situation accurately.
Again, this particular graph on Gold is a "Beta", we are still validating data points against historic information.
February 24, 2013 -- Gold for 2013, Beta Risk/Yield graphs
Refer to Reading Graphs for information on interpretation of the graphs. Note, these are beta graphs for gold - data points are still in process of being checked for validity.
Very strong suggestion that gold will trend down over the next month but, does not appear to move into the risk area. Gold price is likely to stabilize in late spring and have some small "bounce actions" from that point forward. Come the fall, likely to see rising gold prices again. For better understanding, consider correlating these graphs with both the USA and global economic graphs (also on this site). Using those additional graphs, it appears that the USA economy will surge in the summer and during that period, action is gold is likely to be insignificant. It is of interest that once the USA and global economic conditions, as noted in the charts, come off their summer highs, then gold prices may peak again. At this point, it's hard to decipher whether downtrend in USA economy/rising gold prices at the fall period could be from changes in monetary policy (either in US or another country) or some international incident sparking concern (see China 2013). A possible scenario could be an increase in interest rates by the FED but, this would not explain a possible rise in gold during that period.
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Disclosure as of 2/24/2013 - Short gold via DZZ is part of our portfolio at this time.
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