Preschool>= Lesson Status ?
Kindergarten>= Lesson Status ?
Elementary>= Lesson Status ?
Grade 1 Support and Resistance Levels
Grade 2 Japanese Candlesticks
Grade 3 Fibonacci
Grade 4 Moving Averages
Grade 5 Common Chart Indicators
Middle School>= Lesson Status ?
Grade 7 Important Chart Patterns
Grade 8 Pivot Points
Summer School>= Lesson Status ?
High School>= Lesson Status ?
Grade 9 Trading Divergences
Grade 10 Market Environment
Grade 11 Trading Breakouts and Fakeouts
Grade 12 Fundamental Analysis
Grade 13 Currency Crosses
- What is a Currency Cross Pair?
- Crosses Present More Trading Opportunities
- Cleaner Trends and Ranges
- Taking Advantage of Interest Rate Differential
- Obscure Crosses
- Planning Around News and Fundamentals
- Creating Synthetic Pairs
- Euro and Yen Crosses
- How to Use Crosses to Trade the Majors
- How Cross Currency Pairs Affect Dollar Pairs
- Summary: Currency Crosses
Grade 14 Multiple Time Frame Analysis
Undergraduate>= Lesson Status ?
- Why Keep a Trade Journal?
- Benefits of Keeping a Journal
- What Should You Record in Your Journal?
- Potential Trading Area
- Entry Trigger
- Position Sizing
- Trade Management Rules
- Trade Retrospective
- Trading Journal Statistics
- Reviewing Your Trading Journal
- Difficulties of Keeping a Trade Journal
- Summary: Keeping a Trade Journal
Graduation>= Lesson Status ?
- Which Trading Style is Best for You?
- Which Currencies Should You Trade?
- What is Your Level of Trading Experience?
- Should You Be a Discretionary, Mechanical, or Hybrid Trader?
- What Kind of Mechanical System Suits Your Personality?
- What is Your Attitude Towards Risk?
- What Kind of Stop Suits Your Trading Style?
As Gold as it Gets
Before we detail the relationship between the com-dolls and gold, let's first note that the U.S. dollar and gold don't quite mesh very well.
Usually, when the dollar moves up, the gold falls and vice-versa.
The traditional logic here is that during times of economic unrest, investors tend to dump the greenback in favor of gold.
Unlike other assets, gold maintains its intrinsic value or rather, it's natural shine!
Nowadays, the inverse relationship between the Greenback and gold still remains although the dynamics behind it have somewhat changed.
Because of the dollar's safe haven appeal, whenever there is economic trouble in the U.S. or across the globe, investors more often than not run back to the Greenback.
The reverse happens when there are signs of growth.
Take a look at this awesome chart:
Currently, Australia is the third biggest gold-digger... we mean, gold producer in the world, sailing out about $5 billion worth of the yellow treasure every year!
Historically, AUD/USD has had a whopping 80% correlation to the price of gold!
Not convinced? Here's another one:
Across the seven seas, Switzerland's currency, the Swiss franc, also has a strong link with gold. Using the dollar as base currency, the USD/CHF usually climbs when the price of gold slides.
Conversely, the pair dips when the price of gold goes up. Unlike the Australian dollar, the reason why the Swiss franc moves along with gold is because more than 25% of Switzerland's money is backed by gold reserves.
Isn't that awesome?
The relationship between gold and major currencies is just ONE of the many that we will tackle. Keep reading!
While you are logged into your account,
you can save your progress in the School of Pipsology!
- As Gold as it Gets
- Black Crack
- The 411 on Bonds
- Bond Spreads
- Bond Markets, Fixed Income Securities, and the Forex Market