The Gold Economy

A downtrend for stocks since April has wiped out all of the S&P’s gains for 2010…and more. (Source: StockCharts.com)

With stocks at lows for 2010, you probably want to be out of equities for now – or, if you’re feeling frisky, you could also short some dogs, or the S&P 500 itself.

Is there a “safe place” to park your money? Not really.

Commodities have rolled over - as has China, which actually topped all the way last year!

The US dollar is still

Not everyone is getting hurt in the market’s volatility. In fact, the world’s largest gold ETF is marking a major milestone as a result of it.

SPDR Gold Shares (GLD), the ETF backed by physical bullion, recently surpassed $50 billion in assets. Several factors have contributed to the spike in assets: concerns over the eurozone sovereign debt crisis, fears of a double-dip recession, possible inflation worries and a need for a general safe haven for assets.

Carolyn Cui for The Wall Street Journal reports that GLD now hoards a record

Stocks went down sharply yesterday on concerns over consumer confidence and indications that show that the economy is stalling in China. China has been a leading market in this recovery and its bull market has helped the price of industrial metals and base metals.

Over the past few weeks I have highlighted that the market has given signs of a major deflationary crisis and economic slowdown. Yesterday these signs became apparent with a significant sell off on high volume and a break into new lows for the S&P 500 and Nasdaq.

Yesterday major institutions sold equities and sought shelter

Gold: Risk aversion led to falls in equity and commodity markets yesterday but gold again managed to eke out a 0.5% gain. The complacency of recent months is being challenged by a raft of negative data and by increasingly precarious fundamentals. Concerns about Chinese and global economic growth and about the European banking system and sovereign debt are leading to continuing diversification into gold.

Gold is currently trading at $1,244/oz and in euro, GBP, CHF, and JPY terms, at €1,013/oz, £828/oz, CHF 1,344/oz, JPY 110,343/oz respectively.

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Gold in USD