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HFT-Driven “Markets” Continue To Distort Prices

from TF Metals Report:

As The POSX collapses another point today, it’s easy to ask why gold isn’t racing higher. The answer, of course, lies with the algos and their seemingly endless pairing of gold with the yen. This is just a perfect example of how utterly FUBAR all of these “markets” are. Once again, conventional wisdom is tossed out the window due to the total market control of the HFT algo computers. Your example today continues to be the relationship between the dollar index (POSX) and gold.

Again, conventional wisdom holds that as the dollar rises, gold falls and vice versa. Do a Google search of this and you’ll find thousands of articles detailing this inverse relationship. So why, then, has the POSX fallen from 100 to 94 (down over a point today!) and yet gold has barely budged?

Always remember that the POSX is about 60% euro. This is extremely important, especially today, as the fall in the dollar is primarily due to a rise in the euro. Just today, the POSX is down 1.22% but the EURUSD is up 1.54%.

Read More @ TFMetals.com

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