Oil up 5%, gold down 9%

[blazespinnaker]

Can you spot the fundamentally required commodity?

Intrade had chance of recession down to 20% (down from 70%). Pretty wild.

[GRG55]

Re: Oil up 5%, gold down 9%

Can you spot the fundamentally required commodity?

Intrade had chance of recession down to 20% (down from 70%). Pretty wild.

Maybe it's the increased Au supply from all those folks melting down their jewelry to make the car payment? ;)

[FRED]

Re: Oil up 5%, gold down 9%

Can you spot the fundamentally required commodity?

Intrade had chance of recession down to 20% (down from 70%). Pretty wild.

If GDP is 1% and inflation is 7%, are we in recession per Intrade?

[Nicolasd]

Re: Oil up 5%, gold down 9%

From Jan 2000 to now:

Roughly , Oil has risen from $ 30 to $115 "all time high" i.e. 3.83 times
Roughly , Gold has risen from $250 to $915 "corrected high" i.e. 3.66 times

I prefer to carry gold in my pocket .This is less messy and more practical. It allows me to convert my inflation edge in anything I want: oil , clothes, cars, food , housing , anything really.

[GRG55]

Re: Oil up 5%, gold down 9%

From Jan 2000 to now:

Roughly , Oil has risen from $ 30 to $115 "all time high" i.e. 3.83 times
Roughly , Gold has risen from $250 to $915 "corrected high" i.e. 3.66 times

I prefer to carry gold in my pocket .This is less messy and more practical. It allows me to convert my inflation edge in anything I want: oil , clothes, cars, food , housing , anything really.

Why don't you measure it from the low in oil, instead of the low in gold?

[Nicolasd]

Re: Oil up 5%, gold down 9%

Why not ? The point I am trying to make is that chart analysis and conclusions are often dependant on the time frame studied. Oil up 5%,gold down 9% is a short term observation that does not do justice to the longer time frame reality

[GRG55]

Re: Oil up 5%, gold down 9%

Why not ? The point I am trying to make is that chart analysis and conclusions are often dependant on the time frame studied. Oil up 5%,gold down 9% is a short term observation that does not do justice to the longer time frame reality

On that I am in full agreement with you. :cool:

[Nicolasd]

Re: Oil up 5%, gold down 9%

I was poundering if you were an early bird or a nigth owl , then I noticed you were at large , again......;)

[metalman]

Re: Oil up 5%, gold down 9%

On that I am in full agreement with you. :cool:

agree. never confuse short term with long term correlation. my mother-in-law may compliment me one day on my choice of a blue blazer to wear to dinner but that does not mean we get along or ever will.

[blazespinnaker]

Re: Oil up 5%, gold down 9%

True, but you have to ask yourself .. why the decoupling?

The idea is that people forsee a stronger economy pushing up the price of oil.

A stronger economy would firm up the dollar and so assets which are based merely on dollar depreciation (stamps, art, gold, etc), will not increase in price any further.

[blazespinnaker]

Re: Oil up 5%, gold down 9%

If GDP is 1% and inflation is 7%, are we in recession per Intrade?

From intrade:

For expiry purposes, a recession is defined as two successive quarters of negative real GDP growth.

Expiry will be based soley on the data reported by the U.S. Department of Commerce (Bureauof Economic Analysis, Table 1.1.1, "Percent Change From Preceding Period in Real Gross Domestic Product") as reported by the BEA.

If the table as reported at that time indicates that any two consecutive quarters between (and including) Q4 of the previous year and Q4 of the year specified in the contract are negative, then the contract will expire at 100. Otherwise, the contract will expire at 0. For example, if Q4 of 2007 and Q1 of 2008 both experience negative growth then the contract for 2008 will expire at 100.

Clarification: (added 26 Sept 2007) The final figures will be used for expiry - not the advance or preliminary numbers.

[c1ue]

Re: Oil up 5%, gold down 9%

The idea is that people forsee a stronger economy pushing up the price of oil.

This may be true, or it may be the asset allocation swing into the next 'sure thing'.

One thing I've always tried to keep in mind is that the pile of money created during a bubble requires time to dissipate.

In the meantime, it still can do lots of interesting things.

Check out the commodity price behaviors in the immediate post-1929 era, for example.

[renewable]

Re: Oil up 5%, gold down 9%

This may be true, or it may be the asset allocation swing into the next 'sure thing'.

Maybe it's the banks using the cheap loans from the CBs in order to recapitalise - but instead of giving out loans, they're speculating on energy & food futures - to make profits in order to rebuild their balance sheets.

Speculating on gold with the Fed's money would be frowned upon, e.g. Bear Sterns!

[GRG55]

Re: Oil up 5%, gold down 9%

Maybe it's the banks using the cheap loans from the CBs in order to recapitalise - but instead of giving out loans, they're speculating on energy & food futures - to make profits in order to rebuild their balance sheets.

Speculating on gold with the Fed's money would be frowned upon, e.g. Bear Sterns!

Food and fuel prices are political atom bombs, especially in an election year. If the investment banks were using taxpayer backed funds to speculate in commodities that are causing taxpayers to put pressure on their politicians, that's a game that would be short lived I would imagine.

But given the incredible hubris and arrogance being displayed by these former Wall Street "Masters of the Universe" nothing should surprise us, I suppose.

[friendly_jacek]

Re: Oil up 5%, gold down 9%

I think this is hot money chasing alpha.
Commodities are very volatile. There was uranium bust in 2007. Then we had the gold mini-correction recently. Time for oil and energy stocks take some rest now. The Bush team has a nice pre-election tool at their disposal: U.S. Strategic Petroleum Reserve. Open the spigots and oil goes down.