Monday, May 07, 2007

Gold & the US Dollar

The last time the US Dollar index was around current levels gold was trading almost 250$ lower. In early 2005 a bottom in the USDX was realized and the Dollar climbed 11 points. At the same time gold was initially trading within a tight trading range till breaking out and rallying along the USD.

I have been watching some gold & USDX charts lately, my insights are:

The inverted correlation between gold and the USD is not reliable.

The scenario in which gold and the dollar are both trending higher might repeat again.


USD vs gold chart


Short term bottom seems to be in place (or near) for the USDX. If the Dollar will start to rally soon it might have an immediate negative affect on gold but that will be limited both in terms of price and time.

USD index
at

3 comments:

  1. troyTuesday, May 08, 2007 11:08:00 AM

    Again , time to buy gold me think.

    ReplyDelete
  2. AnonymousTuesday, May 08, 2007 12:32:00 PM

    Did you just "buy" gold? Look at that jump 10 minutes ago! :)

    Frank

    ReplyDelete
  3. troyTuesday, May 08, 2007 12:49:00 PM

    Actually just booked partial profits on ultra short term speculative position. Im not fighting the FED. Not today anyway :)

    ReplyDelete