Courtesy of Mish.
Is Gold Tracking Anything?
Numerous people reported last year that the Yen/Dollar (JPY/USD) pair and gold were moving in a direct synchronous relationship. If one rose or fell, so did the other.
I made some comments regarding the relationship on December 12, 2014 in Is Gold Tracking Movements in the Yen, Euro, Anything?
Since the beginning of the year, gold has tracked movements in the euro even better than the Yen. But look still closer. Since November, gold has been inversely correlated to both the Yen and the Euro.
This past year shows why these kinds of correlations are typically meaningless. Sometimes gold tracks the euro, sometimes the yen, sometimes the dollar, and sometimes inversely to all of those.
I see no fundamental reason for gold in dollars to track the Yen.
For whatever reason (or more likely, for no reason at all), the divergence since November (a shift to an inverse correlation from a positive one), might be the end of the previous trend.
Often, by the time people spot such trends, that trend is about to end.
Yen-Gold, Euro-Gold Update
Gold did track the JPY/USD pair since 2012, but that trend appears over.Perhaps it starts again, perhaps not.
Here are a pair of fresh charts courtesy of my friend Nick at SharelynxGold (Gold Charts “R” Us). Subscriptions Required, Red and Blue Arrow Annotations Mine
Euro vs. Yen vs. Gold
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