REAL PRICE OF TSX Real Estate & Gold Indexes, ie: Nominal Prices divided by Bank of Canada $CAD Commodity Index
CLICK CHART TO ENLARGE
The chart above shows the "real" price of the TSX real estate index (RE/CCI green dotted plot line) and the "real" price of the TSX gold index (Gold/CCI yellow dotted plot line).
|
In April 2019, the CAD$ Commodities Index (CCI blue solid plot line) continued ticking up with crude oil and with total CPI again moving up to 1.9% from 1.4%. The nominal and real prices of gold and Real Estate are all heading down. |
|
The real price of the TSX Real Estate Index (green dotted plot line) peaked in 1Q 2016 and since then has put in two lower highs and is currently creating a new "high" as the CCI continues moving up towards the upper boundary of the current 6 year channel. The heat of the 2014-2017 FOMO frenzy is in the history books but spring time in the real estate markets is on with fresh buying.
The summer of 2016 rally in the real and nominal prices of gold was followed by a plunge into 1Q 2017 and the plots continue to work on a new base level support.
War and the rumours of war as well as headlines out of the Middle East, Russia, Europe, China, North Korea, energy producers, the Fed (interest rates) as well as the Trump administration's trade wars which have produced a slippery wall of worry.
Anxiety is growing along with the demand for the USD.
Gold miner's profitability depends on the nominal price of gold but also the cost of getting the metal out of the ground.
When the cost (fuel, and industrial materials) goes down, the real price rises even in the absence of a nominal price rise. Gold mining share prices rise as the real price of gold rises.
CLICK CHART TO ENLARGE
|
In the 1929 stock market crash, Homestake Mining, the representative gold miner of the day, outperformed the DJIA.
This Gold Miners/Commodities RATIO link is a live chart of the $HUI:$CRB ratio. |
