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Message:: [QUOTE="Clawcoins, post: 4242533, member: 77814"]for some reason many people think gold is 100% directed correlated to the stock market. As you have noticed, This is of course incorrect.In a stable economy Gold is much more reverse correlated to the US Dollar Index. If you do a long term chart of Gold vs DOW or US Dollar Index .. well, depending upon your start and end date you can make it look how you want to convince yourself of anything. But generally, going back in time, the stock market has been going up since, basically forever.So technically by now gold should be free and worthless, right? Gold is also considered a "haven" investment, in scenarios of instability, which is what we've had now for a while.  For instance, back when gold was under $1300 many in the oil industry were moving their funds out of oil and into a more "stable" gold - for "wealth storage".  of course, now across the world the Impact of the Covid19 is "fear" and gold, once again is considered a "fear" asset. But keep in mind Gold is used for other means too.People put their money into gold to get the appreciation.  And gold at some point is a physical asset, so supply/demand comes into play.  Also you have to keep in mind the gold price is normally based on New supply, not aftermarket supply which just follows suit with spot price. The latest dump of gold prices has been correlated to the transfer of gold to cash to pay off called margins/options and other equity related investments. Also, since gold is a storage of wealth.  Apparently many are "cashing" in while it's still high and converting to Cash. As when you need to buy stuff, you need cash.  Gold is pretty much useless in times of need .. as stores, etc identify cash and not gold which many doomsday people skew towards.  Many will say it has value but until stores, etc take Gold .. that means Gold has to be converted to cash before usage.  Sure there are few and far exceptions with barter but in general you need cash as that is identified as "money". There are so many "impact" items related to Gold, that it is difficult to answer as the correlations change over time dependent upon the impact issues. ETFs has made it easier to get in/out too, which also skews it's use as a wealth storage and thus skews it's real value. There's many threads that go over this, and the CSR. Always keep in mind, there is always a premium to be paid to buy/sell and move Gold.  And a price for secured storage, etc.  So always keep that in mind.  In times of "panic" and you need to sell gold there may not be a place open to sell it to convert to cash, then you basically get what ever happens. About 12 years ago I *had* to sell some PM.  But no one was buying, so I had to accept a big discount from spot for the Cash.  When ppl buy/sell in a volatile market you are also transferring Risk to that person buying (they could lose money by the second), so expect them to take that into account in their buy price. So at certain times, spot price may not mean much.[/QUOTE]

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