Gold vs US Dollar

[moneymaker]

Looking for a good chart of the ratio of gold to the us dollar,something current would be nice. Specifically looking to see relationship since the divergence started.

[livinincali]

Gold is already priced in dollars. Typically 1 oz/Number of US Dollars. Kitco is a decent source of gold charts.

http://www.kitco.com/charts/livegold.html

[The-Shoveler]

Big drop today for Gold (and Silver), wonder what Peter would say to that.

[moneymaker]

I guess I am looking for something more than a gold chart. I would like to see the delta between gold and the us dollar, let’s say for instance gold goes up 2% and the dollar goes up 1% then the ratio of gold to dollar would be positive, if on the other hand gold went up 1% and the dollar went up 2% then that would be a lower point on said chart. In a normal market they are inverse to each other, one goes up the other goes down, we have not been in a so called normal market for some time.

[moneymaker]

I guess this is as good a chart as I can find http://pricedingold.com/charts/USD-2006.pdf .

[livinincali]

[quote=moneymaker]I guess I am looking for something more than a gold chart. I would like to see the delta between gold and the us dollar, let’s say for instance gold goes up 2% and the dollar goes up 1% then the ratio of gold to dollar would be positive, if on the other hand gold went up 1% and the dollar went up 2% then that would be a lower point on said chart. In a normal market they are inverse to each other, one goes up the other goes down, we have not been in a so called normal market for some time.[/quote]

It’s all relative though. When we say the dollar goes up the question to ask yourself is compared to what? The Euro, the Yen, the Aus dollar, gold. Gold is priced in dollars. If Gold goes up 1% versus the dollar and the dollar goes up 2% against the Euro than gold went up 3% against the Euro and 1% against the Dollar.

There’s silly charts like this one that price the dow in ounces of gold. Is that what you’re after?

http://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart

[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.

[livinincali]

[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.

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