There is no doubt US dollar is hugely important to gold however...

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speckledjim1

11,937 Posts.

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07/02/16

10:47

Post #: 16960515
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Originally posted by wombat53 ↑

I'd like to start a thread next week on the paradoxical relationship between USD and price of gold.
Briefly, we all want the POGUSD to rise.
But if USD also rises , it makes it more costly for buyers in other currencies.
On the one hand if you are an Australian producer, then you can sell it for more as the AUD falls against the USD... so that sounds good but of course violates the principle above...
On the other hand as we have seen recently, as the USD fell rapidly, USD priced commodities rose accordingly, including the USD price of gold (and oil).
Which was then partially
neutralized by the soaring AUD.
I do realise that it depends on the ratio of the two, the rise in price of gold vs fluctuating currency but I do see a paradox here.
What I think we want is a rise in the price of gold (in USD), and no change in the currency.
Correct me if you think I'm on the wrong track, but I do believe that its quite possible if not desirable , for the price of gold to rise, on whatever criteria , and the US dollar to remain unchanged. Producers benefit from the rising price, and consumers are unaffected by currency fluctuations.
I may not have said this clearly but I think it's complex, and I've also had a couple of very strong vodkas...
And I don't mean 30 ml nips.
But I do see a paradox here.
Am I making any sense?

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There is no doubt US dollar is hugely important to gold however US interest rates are the ultimate determinant of gold price and sentiment
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0 Great analysis

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