GBN.V:$Gold correlated against GBN.V:$USB Monthly

One surprise out of the market is the break of correlation between two ratios which up until now over the lifetime of the stock has been almost perfectly correlated.

What I think this says is that gold prices have a lot of room to manoeuvre against bond prices. Bond prices can only appreciate by a percentage overall against equities, but gold prices can rally very strongly, more so than bonds.

We are moving into a higher volatility gold price, and I don't think it will be to the downside, thus gold prices can appreciate more than bond prices.

This also an indicator that perhaps the equity swap derivative in vogue, perhaps since inception of the company, is no longer 'in the money.'

http://schrts.co/1uXRvZ