Views From The Hill

View From the Hill: Gold’s Relative Performance Outshining Commodities and Currencies

By J Clinton Hill, Capital Markets Strategist @ Hillbent.com

Market Commentary: August 10, 2016

bulls-and-bears4Amongst all assets, inter-market analysis reveals the most noteworthy price changes occurring in commodities and currencies.

The US Oil Fund (USO) has resumed its downtrend and made a new 4-day low as the EIA energy report revealed another increase in crude oil inventories which rose by 1.1mm barrels to a level of 523.6mm for a 15.4% increase vs. last year.

To put things into proper perspective, Gold (GLD) has outperformed the USO by 35% thus far 3rd quarter-to-date. Simply put, had you shorted one dollar of USO for every dollar in a long position of the GLD, your gain would be 35%. Other assets succumbing to pressure from gold are the US Dollar Bullish Index (UUP) and the Euro Trust (FXE). On a relative basis, GLD has respectively outperformed UUP and FXE by 11.35% and 10.30%, 3rd quarter 2016-to-date.

Equities continue their incremental ascent to new highs but are technically overbought. Fundamentally, they trade within a reasonably forward P/E range for 2017. We will probably not see any significant moves in stocks until the Federal Reserve’s next FOMC policy meeting. Meanwhile, volume has been extremely light and consistently below daily averages. This is not a good sign, some caution is recommended.

There are no further comments this evening. Please see our ETF table below for a summary analysis of asset class performance.

 


ETF Performance Summary: August 10, 2016

vfth-etf-summary-aug-10-2016
Click to enlarge

 

Signing off at Hillbent…

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