Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Euro Daily Media Noise

Commodities / Gold and Silver 2010 Feb 03, 2010 - 04:14 PM GMT

By: Adrian_Ash


Five stars, one Dollar exchange rate, and a 51% gain in gold...

"GOLD RETREATS as Dollar gains," says a headline from Dow Jones Newswire.

Which makes sense. Because when that isn't happening, "Gold adds to gains as Dollar falls versus Euro," says Reuters.

Thus the intuitive Dollar-gold pairing swings now one way or other in the financial pages...gaining here, falling there...but always joined together as the journalist's deadline is heard hurrying near.

The "whys" and the "wherefores" of a quick market comment demand it as well. Ask a professional analyst for a 10 or 15-word soundbite, and they'll most often tell you, if not vice versa, that "The Dollar is stronger, keeping precious metals under pressure."

Beyond the daily noise, however – and with the single currency unwinding its last eight months' action vs. the Dollar at the end of last week – gold has in fact moved up against both.

You wouldn't know it from scanning the newswires. But since the Euro last crossed through $1.40 – the level it just slipped through once more – gold has risen 22% for US investors. And of course, it's risen by precisely that same percentage for German, French and Italian buyers too.

Because with the EUR/USD cross unchanged since May 2009, the rise in the gold price shows equally on both sides of the pairing.

Indeed, at that $1.40 level – now the Euro's average value since Sept. 2006 – gold has risen time and again...adding 51% for investors both in the States and in Europe from the first crossing of $1.40 in Sept. '07.

Yes, a daily rise in the Euro typically means the Dollar-gold price is up. On a daily basis, their average one-month correlation is now +0.51 since the single currency's launch. That's stronger than gold's correlation with any other asset bar silver.

But it would stand at +1.0 if they moved entirely in lock-step. And as the waxing and waning mapped in the chart above shows, the Dollar's demise hit the currency buffers back in summer '08.

Priced in gold, on the other hand, the greenback has continued to fall. As has the Euro.

By Adrian Ash

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in