Status On The Dow/Gold Ratio
By Katchum:Gold (GLD) has been doing miserably on negative news in Europe. As a result the Dow/Gold ratio has been going up since Europe has been implementing LTRO I and LTRO II late 2011. I believe we will have support now at Dow/Gold ratio of 9 and it could be time to sell the Dow and buy gold (Chart 1).(Click charts to enlarge)
Chart 1: Dow Gold Ratio Short Term
As we look at the long-term chart for the Dow/Gold ratio, we still are in a down trend in the Dow/Gold ratio. Given the bad fundamentals for the economy today I think that trend will continue. If we take a look at chart 2, the Dow/Gold ratio should go to 5 in the course of the next few years.
Chart 2: Long Term Dow Gold Ratio
The Chinese know this and they have been buying record amounts of gold inComplete Story »