Monday, October 16, 2006

Oil and Water

Actually oil and gold - Oil has been called "black gold" but I bet the people who started calling it that never realized how they would some day track together price-wise as they do now.

Here is oil and gold from a price standpoint (using the GLD and XLE ETFs as proxy)over the same time frame. Oil is displayed on the black line and gold on the (what else) gold line.

And here is a picture of the same price wise action using marlyn's curve. The same colors are used in this picture.

Aside from noting that they seem to move together you will also note that they are rising at this time. Also note that gold trails oil in price moves. So maybe you can use oil pricing as a signal to buy or sell gold. I don't know but that's the way it looks to me.

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