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Gold/Mining/Energy : Gold Price Monitor
GDXJ 117.63+3.0%Dec 19 4:00 PM EST
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To: pater tenebrarum who wrote (56378)7/17/2000 5:12:00 PM
From: Zardoz  Read Replies (1) of 116818
 
the XAU underperforms in gold bear markets and outperforms in gold bull markets.

That's not the point... The XAU and POG are NOT correlated well. One CAN NOT looks to the one to determine the others direction. Even in times of gold bear or bull the XAU and POG trend NOT to correlate. To say that the POG/XAU ratio shows a trend in a gold bear or bull is to say that the connection between oil/XAU is of Equal valuation and then one can step into the DOW/XAU. We've seen many charts here that equate DOW/POG, but the point is that IF POG and XAU aren't correlated then NONE of the rest are either! That's the simple case of Statistics.

This is NOT to say that a correlation between gold and XAU does not exist through secondary transcendentals. But only goes to show that the simple first order approximations of linearity do not exist. I stated a long time ago that VIA currencies and monetary supplies you can get a greater then 0.9 correlations. Such results were then used to predict the demise of the XAU well in advance of the decline. In deed such results back in 98 also point to a 2001 bull market for gold.

And if such secondary transcendental formula exists then it only goes to prove that the equating of gold to a fixed inflationary level of $2000/oz is but a silly and ridicules course to under take. In deed it only goes to prove that the market price is the best efficient price and that all other is but speculation from uniformed people.

Hutch
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