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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: mishedlo who wrote (3583)9/10/2003 3:13:11 PM
From: Eva  Read Replies (1) of 4905
 
Date: Wed Sep 10 2003 15:09
trotsky (humble1 13:33) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
well, i would agree that if an equities rout were to coincide with a systemic crisis involving the currency system, then gold would profit from its safe haven status. however, if a stock market decline were to happen without a concurrent dollar crisis, gold might suffer due to hedge funds needing to raise liquidity. note in this context that recently, gold and the stock market had no problem rising in concert - imo due to excess liquidity being deployed in both markets.
over the longer term equities and gold do usually correlate negatively, but there are periods of significant short to medium term positive correlation that can be observed - the tug of war between the 'safe haven' and 'excess liquidity' aspects.
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