Logic dictates, if the U.S. credit rating is no good then our debt and currency should trade lower, no? Also, gold should trade up, right? Well, thus far, this trade is not materializing. The only thing consistent with a ratings shock is lower equities, now down 225 on the Dow.
TLT, 20-30 year Treasuries, down just 0.6%
U.S. dollar, +1.00%
Gold, up but weakening
Yes that’s all true. That’s how it ought to happen. however in the past when there’s been a credit crunch of sorts or a near one the dollar goes bid because of dollar shortages around the world…. see Fed swap lines to the other CB’s.
Yeah, that’s what the market “should” be doing – but it ain’t doing that, manana!
The dollar was already rising before this due to Europe’s debt issues. So perhaps their real crisis trumps our pending crisis. I suspect the sell-off in the PMs is due to a combination of profit taking on the spike after a big run, portfolio rebalancing due to the equity sell-off and maybe some margin issues. Gold is hanging in there. Silver is down which I’d expect on a day like this. Perhaps the expectation of higher interest rates is also helping the USD. Bonds seem to be losing steam as I write.
So, yeah, seems odd but we’ll see how it ends. This will be a low volume week as well which will exacerbate it all.
looks to as f gold/silver wll break into a new trend and rally hard on any bonce in this mrk. and then it may break any corrlation on to all stock indexes and rally till gold /slver meets the paper money supply as state by mike maloney..check hm out
i think it may be doing the right thing.
if the S&P downgrade is taken seriously and an attempt to reduce the debt takes hold…
enter the vortex, the deflationary vortex that is
the bernanke and the nothings’ in the uk will do all they can to manipulate the pm’s.i dont see how,if bric’s decouple,they are gonna take their gold and silver prices with them.
pm guys… you just had the best 10 year run of all time for commodities, 2nd (but close?) best ever for precious metals, and they have been absolutely on fire for the last 18 months as financial stocks stalled out.
how does that smack of downward price manipulation?