We have seen some big swings in gold and Bitcoin since New Years. Gold initially rallied last week then turned down, while Bitcoin soared. In fact it has gone up so much that I’m seeing random people on my Facebook friends list who don’t trade markets or post about them talk about Bitcoin.
I also have gotten emails from people asking me if the rise in Bitcoin is causing gold to drop.
The answer is no.
The reason why I can say that with confidence is that you can mathematically measure the relationship between different things in the market and whether or not they influence each other. It’s called a price correlation.
Check out this chart of gold with the correlation indicators on the bottom of it.
I’m running the correlation of gold and the US dollar index, the TLT bond ETF, and Bitcoin on the bottom of this chart using their 200-day moving …