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Mike Kosares: The connection between QE and gold
3:11p ET Tuesday, June 11, 2013
Dear Friend of GATA and Gold:
Mike Kosares of Centennial Precious Metals in Denver compares the chart of the gold price with that of reserve bank credit and finds a glaring anomaly since April's smashing of gold in the futures markets.
Kosares writes: "The gold price, as a result of its recent plunge, has crossed decisively under the reserve bank credit trend line. The two developments together have made for an interesting chart divergence -- the sort of thing that catches the attention of technicians and value investors alike, particularly if it defies logical explanation.
"This latest correction, more than any I can remember, has the experts scratching their heads. When an upward or downward spike in the market proceeds sans logical underpinnings, a snap-back rally or correction often follows. The last such incident in the gold market occurred in 2008. The market sold off roughly 30% at the height of the financial crisis, and then regained and superseded those losses before 90 days had elapsed. From there the market climbed to all-time highs in 2009."
Kosares' commentary is headlined "The Connection Between Quantitative Easing and the Gold Price" and it's posted at Centennial's Internet site, USAGold.com, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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