The relationship between the dollar and gold

With the dollar gold price in the end there is what kind of relationship? We first take a look at the figure below. One gold to red lines that, while the dollar (U.S. dollar index Lines, said that while the blue light to the naked eye observation, it is clear that we will be able to these two commodities in the early 2004's by the end of September to show a reverse trend in the relationship between the . Through this package to the naked eye to observe the relationship between the dollar and gold, we have to tighten the rates of change to observe whether these two commodities have negative correlation. The chart is the gold index and the U.S. dollar since 2003 until the end of the third quarter of 2004, average monthly rates of change in the relationship map. Golden column on behalf of the average price of gold on the rates of change in the blue column for dollar index Source: Purcell gold and silver on the high rates of change in the average month. From this we can see that two Tu commodity rate of change in the situation is indeed a relationship between the reverse. Interpretation by the membership of the above we can see the obvious, gold and dollar really has a negative correlation phenomenon, that is to say, with gold for the U.S. hedge. Typically, investors in savings capital preservation, will take home the gold dollars, U.S. dollars will take home the gold. Gold itself is not legal tender, but still has its value, will not be devalued into scrap metal. If the strong dollar, U.S. dollar investment opportunity, people will chase dollars. On the other hand, when the dollar on the foreign exchange market to weaken, the price of gold will be strong.