Post by
geezer21 on Nov 20, 2024 8:27am
DXY vs Gold
Prior to the 2008 financial crisis gold and DXY were invesely correlated but that changed after the crises. Since 2008 both gold and the dollar index have both risen together with gold outpacing DXY from June 2010 to October 2012, June 2020 to April 2022 (COVID hysteria spending period), and since October 2022 and counting.
https://en.macromicro.me/collections/45/mm-gold-price/592/us-usd-dollar-gold-price
In a repeat of gold's pull back after October 2012 and April 2022 will gold pull back now?
A purely technical analysis indicates a pull back but with a higher low than that last higher low of $1,665 near the end of October 2022.
The run up in the price of gold starting in June 2010 and June 2020 was the result of quantative easing and COVID spending respectively.
Now the United States is entering a runaway debt situation. The only ways out are inflation or war or dollar collapse or some combination of those.
Globally, in protection against that treasures are being dumped for gold and other hard assets, trade is being conducted in local currencies reducing USD share in global trade, and protectionism is on the rise. Trump's tariff and geopolitical policies will accelerate the United States diminished role globally and the role of the USD.
While technicals indicate a pull back, fundamentals say the price of gold will continue to outpace the USD. The price of gold will continue to stair step higher with the gold price being determined in the physical gold trade making the 100 to 1 leveraged COMEX paper gold market less relevant as seen in its diminished ability to supress the price of gold since gold became a tier one asset at the begining of 2023.