The drop off in oil prices over the last few months has investors excited as the price of crude pushes 6-month lows. As I've commented in this blog before on the upcoming price decline (
here and
here) to be expected, this development should not surprise investors nor should it surprise anyone, really. The cyclical behavior of oil is certainly not new, and the price still hasn't fallen as far as it could based on the last two fall/winter slumps in price.
In other speculative news gold has taken an absolute beating today relative to oil. The correlation between oil and gold is well established, but it seemed as if gold had found its own support levels and wouldn't be as severely impacted by the recent drop in oil prices. I really didn't anticipate the drop in oil prices having this drastic of an effect on gold. Here is the chart over the past week, today
really stands out:
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