Sunday, March 31, 2024

Correlation between gold and the dollar index - A dramatic gap that is expected to close

For many years we have been contracting an inverse correlation between the dollar index and Gold, the correlation is a tool that allows us to predict movements in the corresponding asset if a gap arises between the assets, a gap that sooner or later closes. We are in the middle of a historical event of a sharp upward movement of Gold and on the other hand a shuffling of the dollar index. The next step is to close the gap that has been created, it is similar to an approaching tsunami when before the event the sea water recedes and a strange calm is predicted, after which the tsunami wave arrives in an aggressive and unsurprising manner even though all the signs were already in front of us. 

In the attached weekly graph, you can clearly see the gap created between the movement of rising Gold and the movement of the dollar index


Monthly comparison chart, Gold bursts upwards while the dollar index moves sideways



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