[quote=moneymaker]The dollar is indexed against different currencies differently I think it is weighted against the Euro the highest, like 57.6% or something like that. But if Peter has dollars and Paul has gold and gold goes up more than the dollar then Paul made more than Peter when he sells.[/quote]
Currencies are all relative to each other. Think of gold as just another currency in the realm of currencies. If you had only 3 currencies Gold, Euro, and Dollars. Then one and only 1 can go up against the other 2. One and only 1 can go up against one but decline against the other and one and only one can go down versus the other 2. It’s a mutually exclusive situation. There will always be one currency that is the best relative to the others.
So when you say Gold and the dollar trade inverse each other it really doesn’t make any sense. Gold can go up against the dollar it can go down against the dollar. Gold an go up against a basket of currencies it can go down versus a basket of currencies.
Gold tends to be more volatile than paper currencies so I usually find that gold is either the best place or worst place relative to fiat currencies. When gold goes down versus the dollar it tends to be going down versus the Euro as well.