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Europe, technical analysis, USA, World economy

Gold and Oil contradict VIX Index on terror attack warnings

A research by Stefano Fugazzi (ABC Economics) – Having previously observed that the VIX Index seems to be able to somehow prewarn the financial markets of upcoming major acts of terror – with the Chicago-based “fear” index rising in all observed instances (9/11, Madrid and London bombings, Charlie Hebdo and Paris Attacks) –  we now turn our attention to commodities.

If Gold and Brent Oil – two commodities which are usually looked at in times of financial or geopolitical stress – show consistent patterns ahead of terrorist attacks i.e. they generally either increase or decrease before a given event, then we would be able to unravel evidence to support the view that markets are actually imperfect and therefore are easily manipulated (insider trading).

RESULTS AND CONCLUSIONS: “AIN’T NO CONSPIRACY”

Our review of the VIX Index suggested that commonality patterns ahead of a major act of terror may have occurred by chance on the broad assumption that market movers could not have possibly anticipated their occurrence.

This very conclusion is reiterated while observing the behaviour of Gold and Brent Oil prior to the occurrence of the very same acts of terror. The reader will observe that the graphs reported below do not seem to suggest otherwise.

Capture1 Capture2 Capture3 Capture4 Capture5

 

 

 

 

Data – Gold prices: London Fixing. Brent Oil: Brent Oil Futures – Jan 16 (LCOF6) and Europe Brent Spot Price FOB (Dollars per Barrel) 

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