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Gold/Mining/Energy : Gold Price Monitor

GDXJ 143.83

-4.4%

4:00 PM EST

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To: paul ross who wrote (60335)	10/29/2000 5:02:36 PM
From: Alex	Read Replies (1) of 116931

<<Gold investors have long known that gold has an inverse relationship to the dollar. As gold is measured in dollars, a decrease in the value of a dollar usually results in an increase in the price of an ounce of gold, and vice versa, everything else being equal. Empirically, the monthly data set graphed above verifies this hypothesis, with a correlation of –0.87. This is very strongly negative! A correlation of –1 would indicate gold and the dollar always move exactly opposite of each other, a correlation of 0 would indicate their movements are totally unrelated, and a correlation of +1 would indicate they always move in the same direction. The strong negative correlation lends credence to the popular theory among gold investors today that the high dollar value is the key to the low gold price. The linear trends of the data series are shown as light dotted lines in the graph, and they accentuate the inverse relationship between the dollar and gold.>> gold-eagle.com

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