Gold and The US Dollar

The gold: US dollar relationship is not always dollar down and gold up or dollar up and gold down. If Euros are being used to buy gold, which is what we are told, if the gold seller dumps the Euros and buys dollars, the dollar goes up, the Euro goes down, and gold goes up. So gold and the dollar can go up together.

On the other hand if the seller hangs onto his Euros tightly, because he thinks they will rally, that essentially decreases the number of circulating Euros and the Euro would go UP from the trade. That is less likely, because often when people are dumping Euros to buy gold, the gold seller receiving the Euros is not likely to hold onto them either. He dumps them back into circulation and the Euro declines.

For more, you can see the "Sample Issue" page on my website, SunAndStormInvesting.com. Further details are at the bottom of that page under "Other Interesting Issues." I write a newsletter that tracks 35 different markets including the US dollar index and gold among many others.