Build In Oil Inventories Leads To Plunge In... Gold

Exhibit A in Efficient Market Theory. A few minutes ago the DOE released its crude oil inventory data for the Week of March 25. With Crude inventories expected to decline from 2,131K to 1,500K (you know the whole economic improvement thing and what not), instead we got a build to 2,945K, with Cushing surging from 177K to 1,689K. What would one expect should get killed on this data? Oil right? Yet below we get a glimpse of what mega leveraged and ultra trigger finger happy correlation desks trade like these days.

So let's get this straight: a surge in crude, which implicitly means the economy is slowing down as everyone realizes, and which means the Fed will likely have to step in again soon, is bearish for gold?


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