Monday, January 25, 2010

Home Sales Data Hit The Market

The release of the December home-sales data revealed that sales dropped more than expected - a whopping 16.7 percent. The gold market, after gold descended to $1,092 in a two-steps-down-one-step up pattern, rose on the news.

Interestingly - but only in the very short term - gold and the U.S. dollar moved in tandem. At about the time gold slumped to $1,092, the U.S. Dollar Index bottomed at 78.183. The announcement pushed the greenback up to about 78.3. Since then, the Index has sunk back to the 78.2 level.

This tandency, I should say, is only presented as a curiosity. It's the gold-market equivalent of a man-bites-dog event, if not a silly-season story. At any rate, the fluctuations in both today have been and the usual inverse correlation has reasserted itself.

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