Dow Down 50% Against Gold Since Last Record Dow in October 2007

 

Today’s AM fix was USD 1,574.00, EUR 1,207.98 and GBP 1,043.42 per ounce.
Yesterday’s AM fix was USD 1,584.25, EUR 1,214.82 and GBP 1,044.33 per ounce.

Silver is trading at $28.68/oz, €22.10/oz and £19.09/oz. Platinum is trading at $1,596.70/oz, palladium at $736.00/oz and rhodium at $1,200/oz.

Gold rose $1.20 or 0.08% yesterday in New York and closed at $1,575.00/oz. Silver surged to a high of $29.07 and fell down to $28.51, but it still finished with a gain of 0.42%.


Cross Currency Table – (Bloomberg)

Gold edged higher in Asian and European trading today, supported by modest physical demand in Asia and from central banks. This continuing demand is creating expectations that prices will consolidate at current levels before moving higher again.


Dow Gold Ratio, 2003-2013 – (Bloomberg)

Prices have been range bound between $1,564/oz and $1,587/oz over the past few weeks which suggests consolidation. 


INDU Index Weekly, 2003-2013 – (Bloomberg)

Currency debasement is being seen internationally and will again benefit gold in the medium and long term. The second round of money printing by the Federal Reserve pushed spot gold prices to a record nominal high of $1,920.94/oz in September 2011.

Given continuing debasement new record nominal gold highs and indeed inflation adjusted gold highs over $2,400/oz will almost certainly be seen in the coming months.

This currency debasement and ‘stimulus’ on a scale never before seen in financial and monetary history contributed to the Dow Jones Industrial Average reaching a new record high yesterday.


Gold Price Weekly, 2003-2013 – (Bloomberg)

The Dow Jones Industrial Average hit a new high yesterday, surpassing the previous high of 14,164 on 9 October 2007 leading to proclamations that ‘happy times are here again.’

However, importantly in gold terms, the Dow has not made any gains whatsoever, rather it has fallen by 50% (see chart). 

In gold terms the DJIA has fallen from above 18 to 9.05 today and this clearly shows how the DJIA is not a good barometer for the health of an economy – especially one completely dependent on ultra loose monetary policies. 

NEWS  
Gold drifts on growth hopes; Asia buying lends support – Reuters

Gold Futures Advance on Stimulus Bets, Physical Demand – Bloomberg

Korea Joins Russia, Kazakhstan in Boosting Gold Holdings – Bloomberg

Turkish Feb Gold Imports Rise To 17.34 Tonnes – CNBC

COMMENTARY
Dow Jones High Should Not Be Mistaken For Growth In US Economy – The Guardian

Keiser Interviews Fekete About Paper Versus Physical Gold – You Tube

The Last Time The Dow Was Here… – Zero Hedge

Video: Byron Wien: Gold To Reach $1,900/oz – Bloomberg

For breaking news and commentary on financial markets and gold, follow us on Twitter.


 

Mark O'Byrne

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