Gold Versus Dollar
The US currency is fiat currency traded on foreign market and are used as reserve currency . The price of gold is related to the value of U.S dollar . The value of gold remains stable in comparison to currencies but its price in any given currency can fluctuate as the value of currency changes.
The gold market just like the forex market involves traders' anticipating market movement too, just that the gold is a better way to diversifying risk. Gold has a spectacular relationship with the American dollar and crude oil prices too. Gold trading is comparable to hedge security; India is the largest consumer in volume terms, making up for 27% of demand in 2009, after this is China and the USA.
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Gold Versus the DXY
Similar to 2005 when both instruments rallied together.
Re-monetization of gold in effect while risk aversion theme drive.
Gold is not just in a long-term uptrend in USD terms.
Recent breakouts have been registered in USD, EUR, CHF and CAD terms.
Monetization theme: gold is trading like a “currency”.
Investors turning to physical assets in times of elevated uncertainty and risk aversion.