gold and the dollar: why?

Discussion in 'Economics' started by mind, Oct 24, 2008.

  1. mind


    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

    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
  2. 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.
  3. mind


    you couldn't make a more profound statement, couldn't
  4. 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.
  5. mind


    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 ...