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John Lounsbury
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John Lounsbury, Managing Editor and Co-founder of Global Economic Intersection, provides comprehensive financial planning and investment advisory services to a small number of families on a fee only basis. He has a background which includes 34 years with a major international corporation, 25... More
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Global Economic Intersection
  • The Secret Formula For The Price Of Gold 3 comments
    Sep 28, 2012 12:16 AM | about stocks: GLD, GDX

    My favorite source of snippets has another one. From the 5 Min. Forecast:

    The price of gold has a tight correlation (with occasional divergences) to the sum of the Federal reserve Balance Sheet and China's foreign reserves.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Comments (3)
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  • Moon Kil Woong
    , contributor
    Comments (11015) | Send Message
     
    It will be interesting to see if this stays true. Thanks for the chart and the assumption.
    28 Sep 2012, 12:38 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    Wonder how this correlation plays out prior to 2000?
    28 Sep 2012, 06:50 AM Reply Like
  • John Lounsbury
    , contributor
    Comments (3971) | Send Message
     
    Author’s reply » That's a good question. It is probably only worth checking back to 1992 or 1990 because China was neglible before then. Maybe look at the Fed balance sheet only vs. gold?
    28 Sep 2012, 08:10 PM Reply Like
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