A Yen for Gold

It’s hard to believe that it was only a fortnight ago that we commented on A Yen for a loss,” which discussed the increasingly desperate measures by the Central Banks’ in their idiotic attempts to stoke inflation and economic growth via policy tools destined to compound the problems that they presided over in the first place, too much debt!

One look at the screens this week confirms this, with over 40 global stock-indices now in a “technical bear markets,” cited by a loss of 20% or more, thereby guaranteeing even slower global GDP or out-right recessions, as stock-markets lead the economy, not the other way round as still taught in finance qualifications.

We will stick with the “Yen” theme again, reminding once again about its close correlation (albeit by showing it upside down) against its domestic stock-market, see “Judging Japan” of a year ago, Wall St and even Gold, last brought to our readers’ attention in November 2014’s “Gold Watch.”

So moving swiftly on we present:

11 Feb 2016 .

A 2010 to date weekly data chart comparing the $US Gold price with the $US/¥ inverted and overlaid. As can be seen, the correlation has been pretty good, “stronger ¥ = higher $Gold price,” and vice-versa

Final hint, by placing a Fibonacci re-tracement on the price of gold, it suggests a likely target of between $1380 and $1590, a great 10% to 27% further upside potential. Furthermore, if we get close to these targets, the downside on Japanese and US stocks is fairly large also.

So there we have it, “A Yen for Gold” looks a good bet.

 

 

 

 

 

 

 

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3 responses to this post.

  1. […] recall two postings of earlier this year, “A Yen for a loss” from the end of January and a “Yen for Gold” of mid-February. At its simplest these highlighted the increasingly desperate measures by the […]

    Reply

  2. […] the relationship between these three asset classes via “A Yen for a Loss” penned in January, “A Yen for Gold” in February, moving on to, “A Yen for a Crash” earlier this month, which summarised as […]

    Reply

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