10th October 2014

(Written on Tuesday, October 9 at 10:00 p.m. US East Coast time). Gold and equity markets finally got their interrelationship right in our view, but it took three tries to get there. On Tuesday, the US stock market fell sharply, but gold finished only modestly higher. It then curiously rallied on Wednesday despite higher stock prices (and on argu- ably constructive Fed minutes). Thursday’s action made the most sense to us, with stocks finishing with their worst percentage decline in some six months, but this time gold surged, ending up by about $20/ounce higher on the day. A weaker dollar also helped its advance.