At first are going to detail the relationship between the com-dolls and gold
before. Keep in mind the U.S. dollar and gold don’t quite mesh very well.
Generally, if the dollar moves up, the gold falls.
Here is a traditional logic that during times of economic unrest, investors tend to dump the greenback in favor of gold.
Dissimilar to other assets, gold maintains its intrinsic value or rather, its natural shine!
The reason behind of the dollar’s safe haven appeal, if there is economic trouble in the U.S. or across the globe, investors more often than not run back to the Greenback.
The reverse occurs if there are signs of growth.
Look at this awesome chart:
Now, Australia is the third largest gold-digger… we mean, gold producer in the world, sailing out about $5 billion worth of the yellow treasure every year!
Actually, Gold has a positive correlation with AUD/USD.
If gold goes up, AUD/USD goes up. When gold goes down, AUD/USD goes down.
It going on since years that AUD/USD has had a whopping 80% correlation to the price of gold!
It is not to convince you? Here’s another one:
Look, the pair dips if the price of gold goes up. Unlike the Australian dollar, the reason why the Swiss franc moves along with gold is because more than 25% of Switzerland’s money is backed by gold reserves.
Indeed, Gold has a negative correlation with USD/CHF.
If gold goes up, USD/CHF goes down. If gold goes down, USD/CHF goes up.
Isn’t that awesome?
This function between gold and major currencies is just ONE of the many that we will tackle.
Generally, if the dollar moves up, the gold falls.
Here is a traditional logic that during times of economic unrest, investors tend to dump the greenback in favor of gold.
Dissimilar to other assets, gold maintains its intrinsic value or rather, its natural shine!
Gold and AUD/USD
Recently, the inverse relationship between the Greenback and gold still remains although the dynamics behind it have somewhat changed.The reason behind of the dollar’s safe haven appeal, if there is economic trouble in the U.S. or across the globe, investors more often than not run back to the Greenback.
The reverse occurs if there are signs of growth.
Look at this awesome chart:
Now, Australia is the third largest gold-digger… we mean, gold producer in the world, sailing out about $5 billion worth of the yellow treasure every year!
Actually, Gold has a positive correlation with AUD/USD.
If gold goes up, AUD/USD goes up. When gold goes down, AUD/USD goes down.
It going on since years that AUD/USD has had a whopping 80% correlation to the price of gold!
It is not to convince you? Here’s another one:
Gold and USD/CHF
You can see that, across the seven seas, the Swiss franc, Switzerland‘s currency, also has a strong link with gold. Using the dollar as base currency, the USD/CHF usually climbs when the price of gold slides.Look, the pair dips if the price of gold goes up. Unlike the Australian dollar, the reason why the Swiss franc moves along with gold is because more than 25% of Switzerland’s money is backed by gold reserves.
Indeed, Gold has a negative correlation with USD/CHF.
If gold goes up, USD/CHF goes down. If gold goes down, USD/CHF goes up.
Isn’t that awesome?
This function between gold and major currencies is just ONE of the many that we will tackle.
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