13 Jan 2015
Has Gold broken out of its downtrend? – SG
FXStreet (Barcelona) - Kit Juckes of Societe Generale, notes that some technical analysts view that the price of gold has broken its downtrend, further adding that the fall in oil has taken gold prices in terms of barrels through the 2008 hike.
Key Quotes
“Oil prices made another low overnight as WTI fell below USD 45/b. Some technical analysts are also telling us that the price of gold has broken out of its downtrend. That has taken the price of gold, as measured in barrels of oil, through the 2008 spike. The end-93 and end-98 spikes come next, these have been associated with a pick-up in volatility as investors search for safe havens.”
“Playing with casual correlations and ignoring anything nasty like causation, spikes in the gold/oil price correlate with VIX spikes and therefore with equity corrections and in FX markets, with weakness in CAD/JPY. CAD is the big loser in G10 from the oil price spike and also correlates with credit spreads and volatility.”
“The yen still trades (short term, anyway) as a safe haven currency. CAD/USD is on its way through 1.20 and on up towards 1.25 next. CAD/JPY can target a break of the 200-day moving average at 96.9.”
Key Quotes
“Oil prices made another low overnight as WTI fell below USD 45/b. Some technical analysts are also telling us that the price of gold has broken out of its downtrend. That has taken the price of gold, as measured in barrels of oil, through the 2008 spike. The end-93 and end-98 spikes come next, these have been associated with a pick-up in volatility as investors search for safe havens.”
“Playing with casual correlations and ignoring anything nasty like causation, spikes in the gold/oil price correlate with VIX spikes and therefore with equity corrections and in FX markets, with weakness in CAD/JPY. CAD is the big loser in G10 from the oil price spike and also correlates with credit spreads and volatility.”
“The yen still trades (short term, anyway) as a safe haven currency. CAD/USD is on its way through 1.20 and on up towards 1.25 next. CAD/JPY can target a break of the 200-day moving average at 96.9.”