Recent PA review of two safe havens: Gold and the Yen
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Comparing the current price levels of Gold and the Yen with those of US election levels, I noticed something unexpected. Gold appreciated around 4%, but Yen lost approximately 5%. It looked like a mis-correlation. (Actually I was waiting for 105.00 level in USDJPY parity to place a long-term buy order, however it did not fall as that much.)
So I went back to US Election day and made a brief study on swing points of USDJPY and XAUUSD parities. The following might be noted: (1) Gold and Yen both lost ~15% during the USD rally of Nov.2016-Dec.2016 (2) After 15th_Dec, recovery period started. We might say that (by 15th_April) Gold almost recovered the losses, but Yen was still 5% lower than the US Election day. (3) Between 15th_April and 25th_August was the period of consolidation. Gold ranged in 1200-1300 band, the Yen was range-bound within 109-114 channel. (4) After 25th of August, Gold has rallied further 4% but the Yen was still around 108-109 on 10th of September.
Maybe a rough and general comment, but I conclude as such: - Yen is not buying the risks as much as Gold, like it did before. - BoJ or other market actors do not want a stronger Yen with USDJPY parity lower than 108 level. - Also, we might say that the dovish standing of BoJ had an effect on the current situation.
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