For those of us who live in Euroland, it is very important to observe Gold/EUR correlations, since an extreme deviation from linear correlation provides an excellent opportunity to put some coins in your hand. When I say deviation from linear correlation I mean that Gold moves orders of magnitude more than the EUR, in the sense that when you look at the graph you stop recognizing the usual correlation that you could normally see in the chart. When that happens, price usually goes to a level that would normally require two or three months to reach stability, but just for a brief time in the day.
I got some coins at a German seller the other day at the lowest possible price simply because I was seeing the correlation dilate so much, with the EUR pretty much untouched and Gold getting hit. That non-linear correlation between them put the price at levels not seen since October 2011 and I had seen many times how brief that window of opportunity can be. That, and the fact that the situation with Spanish sovereigns and banks may explode again, I loaded up and checked out.
So, even though I think we are currently in a deflationary destruction of the working class, I recognized that event as a unique opportunity to average on the downside. Those coins are each 25 EUR more expensive with today's gap up.
I also took the opportunity to get a stack of some beautiful silver Chinese 2012 Pandas, which seem to have been released just recently.
S&P 500 Weekly Forecast 5/1
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