Stocks, bonds, dollar Crude oil and gold correlation showing momentum weakness for crude and the precious metal sector – a meltdown possible
Kara Zeilig
Apr. 18, 2008

An analytical study that tracks the gold, oil, stocks, bond and dollar is telling a very different story than the market for oil and gold.

The precious metals and crude oil can face a similar meltdown just like the financial services sector. The rise in gold and crude is mostly due to speculation and fear from a falling dollar. As US dollar finds a bottom and spikes up in the next 12 to 18 months, the crude oil can fall below $60 a barrel and gold can revisit $600 an ounce. A stock market rally and a stable to bullish US dollar can trigger the meltdown. The money can flow out of fold and oil con tracts chasing the stock market again.

The bond market also faces trouble but not a catastrophic meltdown.

The stock market is on the rise. Dollar is becoming stable with the help of stealth central bank actions. The Nasdaq Composite added 2.8 per cent to 2,406.23. while the Dow Jones Industrial Average rose 1.9 per cent to 12,862.71. The Google, ebay and IBM earnings results shows strength in US economy. Over the week Intel rose 6.3 per cent to $22.57, eBay added 3.2 per cent to $31.89 and IBM advanced 7.7 per cent to $124.93. Google shares surged 19.9 per cent to $538.89 as a number of analysts significantly raised their target prices for the stock citing the company’s ability to skip past signs of a US slowdown.

Stocks, bonds, dollar Crude oil and gold correlation showing momentum weakness for crude and the precious metal sector – a meltdown possible
Kara Zeilig
The precious metals and crude oil can face a similar meltdown just like the financial services sector. The rise in gold and crude is mostly due to speculation and fear from a falling dollar.
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