REAL PRICE of GOLD & RE at Brian Ripley's Canadian Housing Price Charts and Plunge-O-Meter

REAL PRICE OF TSX Real Estate & Gold Indexes, ie: Nominal Prices divided by Bank of Canada $CAD Commodity Index

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The chart above shows the "real" price of the TSX real estate index (RE/CCI green dotted plot line) and the "real" price of the TSX gold index (Gold/CCI yellow dotted plot line). July 2019, StatsCan revised their data set on the CCI metric and produced a new peak at July 2005 which I have labelled.

In April 2021, the CAD$ Commodities Index (CCI blue solid plot line) remained above the well defined downtrend channel and continued the rebound rally along with Crude Oil after the bounce off the April 2020 Covid 19 low.

In July 2019, StatsCan revised their CCI data set and produced a new peak at June 2005 (Hurricane Katrina) above the July 2008 WTI price peak and since those peaks, the trend has been lower highs except for the 1Q 2021 spike.

For seven years, from April 2013 to March 2020, TSX Gold under performed TSX Real Estate but in April 2020 that metric switched with the Covid 19 crash in the commodity plot (CCI). That has now flipped again and the TSX Real Estate Index is again on the ascendant.

The fly in the ointment for Canadian gold buyers could be the rising USD/CAD ratio that will dampen enthusiasm for precious metals and other commodities.

Meanwhile, the door to deflation has been opened by the crude downtrend since the 2008 crash and the 2020 Covid contagion lock down. 2021 has reversed last year's trends.

Gold miner's profitability depends on the nominal price of gold but also the cost of getting the metal out of the ground. See the real time StockCharts.com $HUI:$CRB chart (gold miners / commodities ratio) which shows that as the cost of mining drops (fuel, and industrial materials), the real price of the mining product rises even in the absence of a nominal price rise. Gold mining share prices rise as the real price of gold rises.

In the 1929 stock market crash, Homestake Mining (chart below), the representative gold miner of the day, outperformed the DJIA. Also below is the live chart from TradingView for the NYSE:HUI Gold BUGS Index.

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"The NYSE Arca Gold BUGS Index is a modified equal dollar weighted index of companies involved in gold mining. BUGS: Basket of Unhedged Gold Stocks. Symbol 'HUI'." (Wikipedia)