GOLD v/s USD.: changing co-relation

[imaxcare]

It was hard fact that whenever USD goes Up ,gold goes down or vice versa. The pair was inversely proportional as seen in chart. BUT from feb 2010 it changed its mood and now both moving in same direction.

 

[Rhody Trader]

It most definitely was never a "hard fact". The correlations in the markets change quite often based on what the major market drivers are at any given time. And of course correlations will vary considerably by timeframe.

 

[scose-no-doubt]

It was hard fact that whenever USD goes Up ,gold goes down or vice versa

Look at Nov08 to May09 and then try again.

 

[AC26XP]

It was hard fact that whenever USD goes Up ,gold goes down or vice versa. The pair was inversely proportional as seen in chart. BUT from feb 2010 it changed its mood and now both moving in same direction.

Please post a chart that shows EUR vs POG/USD. I bet that one shows a noticeable inverse correlation.
Just my guess.

Happy trading,
AC

 

[scose-no-doubt]

Amateur opinon 1.

Correlations on charts are nothing more than are a visual representation of capital (re)allocation not of some sort of "market rule". It may help if you think in terms of basic supply and demand. Obviously things are not as one dimensional as that but you get my jist. If you learn about the major asset classes and consider, reserve currency status, implications of currency denominations for commods, policy effects on exchange yada yada yada and apply that knowledge to the economic conditions you can look at the charts and see where the money(capital) was flowing and where investor confidence was or wasn't. As I said In early 09 on your chart gold and usd were on the us while stocks were plunging. Cash was pulled from stock and banged into gold and the US dollar. From where? I dunno.

Any corrections on my theory welcome