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Is This Why Gold Is Outperforming?

Tyler Durden's picture




 

Gold is significantly #winning today - well ahead of stocks and the USD after being closely synced with them since the lows last Friday pre-ramp. The question is why? We have an idea. Gold and stocks have been closely correlated on the back of expectations of Fed/ECN unsterilized printing - as gold has taken on the appearance of a risk asset - and rightfully so given the nature of these markets dependence on CBs. However, stocks have outperformed in their own manipulated manner as whatever magic pressure has held gold down continues (as they both rise as simple proxies for more money flooding the system). In a very similar echo of 2009, the last 6-9 months have seen the value of the S&P 500 priced in Gold dip aggressively and then surge back. At current levels we are getting 'rich' in terms of equities priced in real stores of value. And perhaps, just as in 2009, we are about to see real stores of value catch up to equity valuations and continue this outperformance...Gold rallied 23% relative to stocks in the preceding three months.

short-term Gold outperformance...

 

2009 S&P 500 priced in Gold...

and 2012...

 

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Fri, 08/10/2012 - 11:36 | 2694207 RacerX
RacerX's picture

Lol.. It's the "Invisible Hand" in the PM market.

Fri, 08/10/2012 - 11:47 | 2694249 malikai
malikai's picture

Here's how we see gold today:

http://www.quantsig.net/img/com_gold.png

As usual, running on the public console:

https://www.quantsig.net

Fri, 08/10/2012 - 11:52 | 2694270 Mark Carney
Mark Carney's picture

wow this place is a ghost town compareed to this time last year....I'm sure once we get a dive in equities this place will be the happening bar again.

 

Cheers

Fri, 08/10/2012 - 12:05 | 2694302 Turd Ferguson
Turd Ferguson's picture

I'm sorry but this is inaccurate. 

Gold rallied as paper metal was bought following a a series of large physical orders in London.

Fri, 08/10/2012 - 12:09 | 2694317 malikai
malikai's picture

...preceeded by a large stop hunt at about 8:30 london time. Great buy.

Fri, 08/10/2012 - 12:25 | 2694368 Turd Ferguson
Turd Ferguson's picture

To whomever gave me a down arrow...Why don't you dial up Barclays and check to see if I'm right...

Fri, 08/10/2012 - 12:31 | 2694394 malikai
malikai's picture

Downvotes are votes of confidence to a good contrarian. Embrace them.

Sat, 08/11/2012 - 11:04 | 2697147 They Tried to S...
They Tried to Steal My Gold's picture

AS money is flowing out of US bonds and into riskier assets, GOLD is one of the beneficiaries. Particularly the Miners!

 

Fri, 08/10/2012 - 12:09 | 2694318 tmosley
tmosley's picture

Everyone knows what is going on.  This is just the hushed silence as we wait for the knives to come out.

Fri, 08/10/2012 - 13:12 | 2694491 XitSam
XitSam's picture

*snikt*

Fri, 08/10/2012 - 12:43 | 2694423 BandGap
BandGap's picture

And we get the hand job.

Fri, 08/10/2012 - 11:40 | 2694220 yabyum
yabyum's picture

Gold is winning because it is gold.

Fri, 08/10/2012 - 12:40 | 2694416 whaletail
whaletail's picture

C'mon now: that transitory 10+ year bull market in gold will fade any day now.-MDB

 

Fri, 08/10/2012 - 11:40 | 2694225 EL INDIO
EL INDIO's picture

Either PMs will rally or Stocks will plunge or a bit of both.

No one knows.

Fri, 08/10/2012 - 12:37 | 2694405 WestVillageIdiot
WestVillageIdiot's picture

I'm 100% certain that you could be right or wrong. 

Fri, 08/10/2012 - 12:45 | 2694426 old naughty
old naughty's picture

Since one doesn't cancel the other, you are two times 100% certain?

Fri, 08/10/2012 - 11:42 | 2694230 bigdumbnugly
bigdumbnugly's picture

And perhaps, just as in 2009, we are about to see real stores of value catch up to equity valuations and continue this outperformance.

that's the word on the street

Fri, 08/10/2012 - 11:43 | 2694236 Mr. Fix
Mr. Fix's picture

Ya can't hold it down forever...............

Fri, 08/10/2012 - 11:44 | 2694238 Abraxas
Abraxas's picture

Over the long run, gold will always be going inversely to the dollar (or whatever other currency people have). Equities and bonds, not so much. It's not that gold is outperforming, but that dollar is underperforming.

Fri, 08/10/2012 - 11:45 | 2694243 tocointhephrase
tocointhephrase's picture

WINNING

Fri, 08/10/2012 - 11:47 | 2694247 LMAOLORI
LMAOLORI's picture

 

 

 

So more printing can be expected.

 

I am wondering if there is a behind the scene's battle brewing again I am not a Gold Bug my preps have just gone another direction. Romney said he would get rid of ben.

A Gold Bug as Secretary of State in a Romney Administration?

Game Changer for Gold

 

Fri, 08/10/2012 - 11:52 | 2694272 Bay of Pigs
Bay of Pigs's picture

Robert Zoellick? Give it a rest.

Fri, 08/10/2012 - 12:08 | 2694313 XitSam
XitSam's picture

Robert Zoellick? Former head of the Wold Bank, former managing director of GS, that Robert Zoellick?

Fri, 08/10/2012 - 20:21 | 2695812 4horse
4horse's picture

Robert Zoellick
                        is the Crème de la Crème of Washington's elite

the scum also rises

like stinking effete stank behind Monsanto and its GMO cheeesytoes till bubblingup from whatever lafite mouton rothschild which works its way into the upper echelons of every shadowy body and organisation of thinkers and power-brokers you can think of__

http://www.infowars.net/articles/may2007/310507Zoellick.htm

the complete stinktanker, he is the ultimate intel-op, agitprop and just complete all-around mission creep 

__4such ratfuck apparatus as Goldman Sachs, PNAC, Bilderberg, CFR, Trilateral Commission, asstReaganTres, Asspender, Enron Energizer, FannyMayor, NAFTAmaster, CAFTAdrafter, Bush2Brain, asstSec2every1worlder, Bank Prez sino-sneaker  Belfer-Petereater of BigIdeas everywhere he's there to brand and saythename sayanim evil*

 

ZoellickZelikowZackheim all-the-way-back-to Zwack Anthrax manufacturing facts,on-the-ground even dr.philip zack
                                                                           a rothschild utility infeeler tagteammate and freetraitor whose many positions belie the greatest significance of a commission which dare not speak its name peachy keen hamilton

 

 

 

 

9/11

 

 

 

 

*evil in the world—...People driven by enmity or by a need to dominate will not respond to reason or goodwill. They will manipulate civilized rules for uncivilized ends.”

Fri, 08/10/2012 - 12:46 | 2694431 whaletail
whaletail's picture

We changed the curtains in our house when we moved in, too. 

Fri, 08/10/2012 - 11:49 | 2694257 Long-John-Silver
Long-John-Silver's picture

GOLD Bitchez!

 

Sorry! I just had to do it.

Fri, 08/10/2012 - 11:52 | 2694273 Anne Ominous
Anne Ominous's picture

Warning: Keep safe distance from jet fuel fire to prevent vaporisation.

Fri, 08/10/2012 - 11:52 | 2694274 Dr. Engali
Dr. Engali's picture

Barbaric relic. Civilized people invest in productive companies.

Fri, 08/10/2012 - 12:17 | 2694342 fuu
fuu's picture

Charlie Munger Marches On: http://www.youtube.com/watch?v=XCXcQ1oBoo4

Fri, 08/10/2012 - 11:53 | 2694276 Flakmeister
Flakmeister's picture

Au shucks....

Fri, 08/10/2012 - 13:19 | 2694508 Hulk
Hulk's picture

Ag Riculture...

Fri, 08/10/2012 - 11:59 | 2694285 Doubleguns
Doubleguns's picture

If this is a repeat of 09....we are getting QE.

Fri, 08/10/2012 - 12:05 | 2694300 GERxit
GERxit's picture

It's going up because they can't manipulate it forever!

BUY AS LONG THOSE SUCKERS KEEP THE PRICES LOW!

Fri, 08/10/2012 - 12:36 | 2694404 HardAssets
HardAssets's picture

Yep - - - like driving down the freeway with a busted speedometer. Just because it reads 0, doesn't mean youre not really acceleratiing.

Fri, 08/10/2012 - 12:05 | 2694303 slewie the pi-rat
slewie the pi-rat's picture

tyler mentioned this dynamic a day or two ago and he may have nailed it!

keep drinking, tyler!

Fri, 08/10/2012 - 12:15 | 2694333 Money By Trading
Money By Trading's picture

I am looking to buy GDX soon.  Charts here:

http://wp.me/p2CT0a-2H

Fri, 08/10/2012 - 12:20 | 2694348 Unbezahlbar
Unbezahlbar's picture

The PMs have been good to me as has oil (USO, SLV and GLD).  They are all up quite a bit (GLD & SLV over 200% for me) while my house is down 32%.   As purchasing power continues to sink across all currencies, seems that hard assets will continue to rise in response. Sadly, I'm afraid my house is in for 20% more drop...but then again, I bought long before the Bubble Peak and put 50% down so I am simply back where I started.  The zero downers, NINJAs and Flippers are feeling the correction -- i.e., regression to the mean-- the most.

 

BTW, where is that dapper fellow Mozillo?

Fri, 08/10/2012 - 12:27 | 2694380 loveyajimbo
loveyajimbo's picture

Here is a news flash:  GLD and SLV are total FRAUDS and you will soon be cleaned out.  Try GTU and PSLV instead.  you are welcome.

Fri, 08/10/2012 - 12:38 | 2694410 Snidley Whipsnae
Snidley Whipsnae's picture

Here is a news flash for you: if it has counter party risk it isn't gold or silver... it's just more bs paper.

Fri, 08/10/2012 - 12:51 | 2694442 Getting Old Sucks
Getting Old Sucks's picture

Like I tell my son who owns GLD.  You own what you're holding.  If it's physical gold, it's gold.  If it's shares in a trust holding gold, it's paper.  He figures he'll get mine.  LOL, it's going to his son. 

Fri, 08/10/2012 - 12:23 | 2694365 Confundido
Confundido's picture

I don't follow you, Tyler....hmmm the article is simply a tautology, while its title makes one believe that a good explanation will be given.

Fri, 08/10/2012 - 12:33 | 2694399 Snidley Whipsnae
Snidley Whipsnae's picture

explanation = all mkts now manipulated by central banks, including libor

what is it that you don't understand about this?

...and, no tautology needed.

articles like this are a waste of bandwidth and time.

next up: some jack off hauling out a bunch of bs backward looking charts attempting to convince us that he/she knows what is coming next. Hey, the CBs are making it up as they go so how can some jack off with an arm load of charts know a damn thing?

Fri, 08/10/2012 - 14:02 | 2694706 viahj
viahj's picture

RobotTrader?

Fri, 08/10/2012 - 12:27 | 2694377 Money 4 Nothing
Money 4 Nothing's picture

Gold *should be at $3,200.00 right now, so techincally, it's underperforming via supression locked in a Bot pre-determind trading range. $1,570.00 - $1,610.00

I still bought 20K of Gold this morning and turned in my Silver holdings ready for SHTF.

Good luck and buy a shovel and a six pack.. 

Fri, 08/10/2012 - 12:35 | 2694403 Snidley Whipsnae
Snidley Whipsnae's picture

Congratulations! You have just attracted all the drones in your area. Consider yourself surveiled.

 

Fri, 08/10/2012 - 16:31 | 2695251 smiler03
smiler03's picture

+1 for the interesting link.

Fri, 08/10/2012 - 12:50 | 2694438 vincent
vincent's picture

If you purchased metal on Monday, played golf Tue, Wed, and Thur, and sold today...congrats.

Fri, 08/10/2012 - 13:55 | 2694664 supermaxedout
Fri, 08/10/2012 - 14:28 | 2694806 ddtuttle
ddtuttle's picture

How the heck can the Chinese buy 100 tons of gold per MONTH, and not drive the price up?  And they're not the only ones.  CBs all over the world are buying by the ton.  This should be impossibe, unless the chinese are getting gold that isn't on the market, per se.

Ben is not stupid, he can see that the US has a debt load it cannot pay back.  There WILL be a default or significant inflation.  A gold standard is VASTLY more desireable to a Yuan standard.  And in reality, the Yuan is not even close to a viable reserve currency.  The chinese are not trustworthy, their new exploding economy is too new and not proven and they are culturally and politically incompatible with the existing world order.  The world would simply reject the Yuan as the sole reserve.

However, they are important enough to make sure they get through this adjustment intact, and not angry about the outcome.

So are they being allowed to convert some of their treasury hoard to bullion at a controlled price?  Are we preparing for a remonetization of gold as a part of a more complex global reserve system?

 

Sat, 08/11/2012 - 21:33 | 2698090 SilverTech
SilverTech's picture

"Are we preparing for a remonetization of gold as a part of a more complex global reserve system?"

Uh, no. These chumps are not planning anything constructive or even logical. They're desperately trying to dominate the world because they see their power crumbling. They mistakenly believe thhat they can control processes, like the economy, that are essentially and by their nature uncontrollable.

They're suppressing gold because it's the enemy of fiat currency, their ultimate power.

Get ready for more and more desperate moves as the powers that be feel that power slipping away.

They will not go gently into that good night.

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