I am an avid fan of the work of Benoit Mandelbrot and his book "The Misbehavior of the Market". In this book, he details how the market cannot be categorized using standard statistics and exhibits fat tails. More so, he states the crash of 1987 was a 23 standard deviation event and that order of magnitude in stocks should have never been seen in about 45 billion years, or 3x the estimated lifespan of the universe.
I bring this up as it appears that gold has gone though its own singularity event yesterday. Not to the same extent as crash of 1987, but still dramatic in scope. Just look at the following chart.....
This charts shows the rolling 1-year Z-score of the daily changes in the price of gold. Yesterday's move in the price of gold was an -8.4 standard deviation event, an order of magnitude never before seen in the last 13 years. This is not to imply that it corresponds or implies to any significant price outperformance on a go forward basis, but it is interesting none-the-less.
I bring this up as it appears that gold has gone though its own singularity event yesterday. Not to the same extent as crash of 1987, but still dramatic in scope. Just look at the following chart.....
This charts shows the rolling 1-year Z-score of the daily changes in the price of gold. Yesterday's move in the price of gold was an -8.4 standard deviation event, an order of magnitude never before seen in the last 13 years. This is not to imply that it corresponds or implies to any significant price outperformance on a go forward basis, but it is interesting none-the-less.
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