GOLD: Night and Day, you are the one….or not.

The older Slog veterans (hereunto referred to as Slogiatrics) will remember the days when, in my former identity as notbornyesterday.org I pointed out (in July 2009) how:

‘…falling gold prices since mid 2007 have nearly always preceded stock market days expected by opinion leaders to be bad. Furthermore, they tend to take place in the half-hour before and after London and New York markets open. The falls range in size, but are never less than ten bucks – and have been as high as thirty-five. On 9/11*, the price fell $3.50. Before the latest econo-fiscal crisis, gold had ALWAYS risen in price during a period of plummeting equities, and ALWAYS risen faster still during uncertainty about currency values/governments printing money. We’ve had all these factors over the last two years, but the price of gold has on the whole remained stubbornly below a $1000 breakthrough level..’

I also analysed (albeit in a pretty amateur way) how the NYSE am price of gold always plummeted after a Asian pm rush of buying the stuff. Now comes news via Slog comment threader Chris Dawson of a rather more sophisticated interrogation of this syndrome. He writes:

‘I’ve imagined 3 investors, each starting with a million quid on 2nd January 1991, using the 3 consistent investment strategies of:-

1. Buy every day am, sell pm.

2. Buy every day pm, sell following morning.

3. Buy on 2nd Jan 1991 & keep your gold, ie follow the official market.

As of yesterday, investor 3 would have his original 5k troy oz stash, worth just over £5m, lucky man.

Investor 2 would have amassed a gargantuan 37k troy oz stash worth £37million.

Investor 1 would stand shirtless with 131oz of Gold left, worth £133k, an 87% loss.’

Chris got to this after reading an article on zerohedge by Chris Martenson. You can study the full workings out here.

So we can all see just how right the Telegraph’s Thomas Pascoe was to blow the whistle on this gravy-train of capped-price Fort Knox emptying.