these two continue to amaze me. why is the dollar so strong and gold so weak? four weeks ago i expected the greenback to go well above 1.60 to the euro and gold to leave 1.000 behind. one bloomberg headline was quite weird: "gold drops below 700 as investors flee to cash" it turned out that they meant that investors were forced to liquidate gold to cover equity losses. still little weird to me, but least not as weird as a flight from gold into cash. illustrates pretty well how confused everybody seems to be. what puzzles me is that usually, when the US is in trouble, the dollar falls and helps them. and the fundamentals for gold are fine, plus the crisis should provide technical momentum.
the market loves to make the public news watchers bleed. so wherever the public is tipping its weight, it'll be bleeding once market price action confirms.
why wouldnt gold get weak vs the dollar? The dollar has pounded every major currency (except for the yen) in the past month. Dollar has pounded the euro, the pound(no pun), the loonie, the mexican peso..ect. Those countries are all paying the same price they were a few months ago for gold in their currency.
that is right. actually i see the connection between the two, yet don't understand the argument for either from separated perspective. ... and i know how weird that sounds ...