Gold Backtests Argue for Pullback
Top Quant
Housekeeping: This was alluded to in **JPM's $4,000 Walkthrough and Analysis and in the Founders post of a similar name.1
Intro:
Several times we've made the point here that historically gold rarely goes up more than 2% in a day. When it does so, statistically it was almost always 2 to 6% lower over the next two weeks. Admittedly and happily, it hasn't done that in a long long time.
As such, all of gold’s short term correlation risk factors have been blown out of the water these past 2 years. But here is what one of Wall Street's best quants sees looking at some intermediate timeframe correlations that have yet to be tested.