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Old 01-08-2012, 09:42 PM   #1
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eBay / 24hgold.com Widget

Once again, the Bearing brings up the Widget, the best (but very imperfect) tool that I have to track "paper gold" price vs. eBay offers on Gold and Silver Eagles.

The purpose of this thread is to introduce "mis compadres" to what I am doing as well as inviting comments on my methodology (etc.).

OK, I only have data from 29 Dec to now, and took that data in a non-standardized way (some days I took two sets, and I skipped some days). I probably violated "all the laws of statistics" in doing this, but so what. Here is the data set (I hope this pastes OK...) and four correlation coefficients:


Tracking the eBay / 24hgold.com PM Premium Widget

AGE ASE Au Ag
Prem Prem Price Price

17% 74% $1,554 $26.95
19% 66% $1,530 $26.58
16% 115% $1,558 $27.59
16% 41% $1,577 $28.30
15% 28% $1,564 $27.79
11% 56% $1,586 $28.35
10% 32% $1,603 $29.49
10% 65% $1,599 $29.07
8% 43% $1,611 $29.29
10% 44% $1,616 $29.31
9% 69% $1,607 $28.84
10% 33% $1,627 $29.33
11% 37% $1,616 $28.61
10% 48% $1,616 $28.58
10% 55% $1,607 $28.67


0.379310939 AGE:ASE

-0.925995551 AGE:Au

0.915730773 Au:Ag

-0.494453669 ASE:Ag

The "AGE:ASE" is the correlation between the two premiums of Eagles vs. "paper price". 0.30 is sort of considered about the minimum correlation in the "Social Sciences" (to be "significant"), so this 0.379 would be a "moderate correlation".

"AGE:Au" is the correlation between premium for Gold Eagle vs. "paper price" of gold. Note it shows an IMPRESSIVE -0.925 NEGATIVE correlation (that is, when price of gold goes down, the Premium for the physical goes UP).

"Au:Ag" is the correlation between paper gold and paper silver. Over the VERY SHORT term, a HIGH correlation of 0.915 seems to me to be very normal and OK. Over a longer term, I would expect that number to come down a bit, reflecting what we have seen lately (silver down a huge % off its high, more so than gold).

"ASE:Ag" is the correlation of silver premium (eBay "spot" minus paper silver price) to paper silver price. A negative correlation (-0.49) like that is MUCH smaller than the stronger AGE:Au, probably due to the WILD swings in the ASE premium to paper. Look carefully and you will see one datapoint of 115% premium to spot silver.

Discussion:

It is important to note that this dataset is very small, and really only follows the aftermath of another "price takedown." I need MUCH MORE data before I can start coming up with more interesting results. I would guesstimate I need some 3 months worth.

I have been following this Widget for a year or two. Most of the time the AGE premium is typically from 5.5% - 8.5%. Anything above 10% is usually seen on a price takedown. I would expect that the AGE premium is likely to ease back down into its normal range soon. ASE premium range is more typically say 16% - 25%. These ASE premiums are among the highest I have ever noted from the Widget.

*****

Graphs and other stuff I will put up fairly soon (in a few days I guess).

Suggestions are VERY WELCOME!

EDIT:

Ahh, too bad the formatting came through badly. At some point (later) I will ask our congenial host (PMBug) how to get this posted in a prettier manner.
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Last edited by DoChenRollingBearing; 01-08-2012 at 09:46 PM.
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