EURUSD 1.1851 |
USDJPY 111.52 |
GBPUSD 1.3772 |
AUDUSD 0.7485 |
USDCAD 1.2406 |
GBPJPY 153.59 |
EURJPY 132.15 |
AUDJPY 83.48 |
CADJPY 89.86 |
Silver 26.23 |
Friday's $2431 high in gold consisted of a 21% rise from the Feb 14th low. Such percentage extensions from key lows or/and technical levels such as the 200-DMA, could flag crucial opportunities for partial/full profit-taking. Watch here.
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That is right. And the gold/oil ratio is best used for medium term forecasts on the likely direction of the economy. The way I see it now is that if the Gold/Oil ratio drops considerably, i.e. below 20 mainly on rapid increase in OIL rather than rapid decline in GOLD, then it could signify improvement in global growth and hence more concrete increase in risk appetite.
Ashraf
A low gold to oil ratio means a higher demand for energy and thus a presumption of increased economic activity and more enthusiasm for risk. While a high gold to oil ratio implies less demand for energy and thus a presumption of a contraction in economic activity and less enthusiasm for risk. The opposite can be said about the price movement in Gold in regards to a safe haven.
However, we also need to analyze the reasons driving the change in the ratio. Is it an increase or decrease in just Gold or just Oil or, a combination of both? And, what this relationships is telling us about the human psyche in regards to risk appetite?
Also, this seems like a chart to watch on a daily/weekly/monthly chart to gauge the overall market sentiment not so much a day trading indicator.
As Gold raises it definitely affects GBP/USD and EUR/USD... both fellows a trend with USD/JYP. They move in a direction vice versa to Gold. Thanks Ashraf and it is a privileged meeting up all times.
We need to be careful whereby a lot people are thing Gold bull at a time, it doesn't work like that. It will falls some times before it goes up completely.
EURJPY looks like will test 127.40. if we take that out, then we're looking at 133, considering no implosion of any Eastern European bank emerges.
Ashraf
Considering the terrible conditions in Japan - do you see a perpetual rise in USD/JPY because no one wants the JPY and the USD is still a safe currency even if the VIX rises and risk-appetite plummets with the next inevitable downturn in equities. Good time to go long USD/JPY? I see no good reason for it to turn down. Thanks and hope the Expo in NY was successful for you - glad we got a chance to meet!
As an article in today's FT put it. this gold mani is the most substantive and logical. Although demand for jewellerry is not as strong as investor and physcial coins demand, the prospects of a sharp spike beyond $1,000 are quite high. Not sure if the Dow/Gold ratio will have to drop back to 1980 level i.e. 1.3, but you can use 2.0 as a target from the current 7.4.
Ashraf