It has been reported that the Chinese have imported more Gold from Hong Kong; further diversifying away from king dollar; more specifically, in September Chinese total imports increased by 30%. This figure is in line with historical efforts by the Chinese…rising to a total of 69.7 tons.
Another headline includes the looming fiscal cliff. Perhaps the closest thing to look at historically was how the respective markets acted during the USA debt ceiling and debt downgrade debacle. During this period of volatility, there was a clear divergence between gold and the equity markets. The current correlation coefficient is around a 0.64 (weekly bars over ten periods). Should the fiscal cliff happen tomorrow, given the aforementioned coefficient, one would expect the gold market to fall with the equity market. However, this coefficient has been anything but smooth over the years. It has flipped around from positive to negative many times over. The only thing that can be guaranteed it basically volatility.
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