…the US dollar to Gold ratio.
The remarks scribbled on the chart should be enough, but just to make it clear methinks we just hit a short-term bottom for the ratio and I expect it to rise. The most likely scenario is the Dollar upping and gold downing. But also keep in mind that it’s just a chart and these things are too revered by too many people…they only work til they don’t.
Don’t tell the Jim Sinclair sheep brigade that somebody dares to suggest a gold downturn, though. And the first person to use the phrase “gold backwardization” in a mail gets turned into a frog. These people want to believe that….
a) yes, there’s deflation in currencies
b) gold is a currency
c) but deflation doesn’t affect gold
…..which is what normal people call ‘having your cake and eating it’. A smart friend of mine read a goldbug analysis of gold backwardization yesterday and called it “like a tealeaf reader obsessing over one tealeaf” which I thought was pretty accurate….and funny.