Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Gold And U.S. Dollar, Buffett, Trump, – Nothing Has Changed

Commodities / Gold and Silver 2018 Aug 28, 2018 - 06:35 AM GMT

By: Kelsey_Williams

Commodities

“Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire…” — Warren Buffett Feb2012

During that same period (1965 – 2012) the price of gold increased from $35.00 per ounce to more than $1800.00 per ounce – a whopping 5000%.  Seven years ago this month (August 2011), the price of gold peaked at $1879.00 per ounce, and has since fallen 30% to approximately $1200.00 per ounce currently. That drop in price is the inverse reflection of the U.S dollar’s temporary strength and stability, which is up by 30%. You can see that on the chart GOLD PRICES AND US DOLLAR CORRELATION below…


                          (This interactive chart compares the daily LBMA fix gold price with the daily closing price for the broad trade-weighted U.S. dollar index over the last 10 years.source

Looking at the most recent activity, the U.S. dollar is currently up 10% from its low point earlier this year in January, whereas the price of gold has declined 14% from its corresponding high point that same month.

Here is another chart US DOLLAR INDEX HISTORICAL CHART…

(This chart of historical data shows the broad price-adjusted U.S. dollar index over the past 43 years as published by the Federal Reserve.) source

When gold peaked in January 1980 at $850.00 per ounce, the U.S. dollar had just begun to move upwards from its decade-long decline, eventually reaching its ultimate high of 128 five years later. A secondary peak at 113 in February 2002 occurred just after the price of gold reached its nadir at $250.00 per ounce. The subsequent decline of 30% in the U.S. dollar resulted in a seven-fold increase in gold’s price.

Again we see the same pattern over and over. And while some may get tired of hearing it, they apparently haven’t gotten the message: “the price of gold is an inverse reflection of the fluctuating value of the U.S. dollar – nothing more, nothing less, nothing else” …Kelsey Williams

On January 20th, 2017 Donald Trump was inaugurated as the 45th President of The United States of America. The price of gold was $1209.00 per ounce.

Today, August 27th, 2018, the price of gold is $1209.00 per ounce.  And the U.S. dollar index stands currently at 125; exactly where it was on January 30th, 2017 – ten short days after President Trump’s inauguration.

With all that has happened in the past two years, and with all that was supposed to send gold infinitely higher, nothing has changed.

Those who were insisting that “President Trump’s election is good for gold” are now telling us that his trade war is good for gold. And that his calls for a weaker U.S. dollar will lead to an impending collapse of the U.S. dollar; which will lead to much higher gold prices.

Calls for gold’s price to ‘soar’ to $5,000, $6,000, $10,000 per ounce abound. And the adamancy of these predictions is even stronger after gold’s most recent drop.

And, too, “fundamentals for the miners have greatly improved and the gap between them and the price of gold will soon narrow significantly”.  It has to, right?

If you consider yourself bullish on gold (for most people, this means only one thing – they expect the price of gold to go higher; a lot higher), there is no shortage of fundamentals to get you excited.

Anything that someone suggests or implies will cause gold’s price to rise, is now a fundamental for gold. These include: interest rates, the economy, the Euro or Yuan or Yen, Brexit, trade wars, conspiracies, social unrest, terrorism, etc.

Analysis of gold,as it is proffered by most of those associated with the yellow metal, is misleading and harmful; and it generates unrealistic expectations.

Gold’s value is not determined by world events, political turmoil, or industrial demand. If you have in mind a particular scenario or series of events that you think are critical or important with respect to gold, then you need to reconsider them carefully as to what specifically would be the effect on the U.S. dollar. Nothing else matters.

The U.S. dollar is the world’s reserve currency and gold is priced in U.S. dollars. If the U.S. dollar continues to strengthen, then gold prices in US dollars will continue to decline. If the US dollar weakens, then gold’s price in US dollars will go up. It can’t be any other way.

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!

By Kelsey Williams

http://www.kelseywilliamsgold.com

Kelsey Williams is a retired financial professional living in Southern Utah.  His website, Kelsey’s Gold Facts, contains self-authored articles written for the purpose of educating others about Gold within an historical context.

© 2018 Copyright Kelsey Williams - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - 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

6 Critical Money Making Rules