Correlation of gold with oil and dollar

For nearly a century, leading analysts have been tracking a clear correlation between the price of gold and the exchange rates of most global currencies and the prices of certain assets, most notably oil.

This means that gold, a precious metal, can be

futures . The correlation is easily identified by simultaneously opening several charts of the assets needed for comparison, while observing the following parameters:

• Time frame – all charts should be the same, for example, one day or D1.

• Correlation can be both direct and inverse. In the first case, the price of gold falls, and with it the price of the compared asset. In the second case, on the contrary, the price of gold falls, and the second asset rises. This also applies to price growth.

• Delay - it is not at all necessary that the two analyzed charts will be almost mirror images; in some cases, there is a delay of a day, a week, or even a month.

The strongest connection between the price of gold and the exchange rate of the US dollar and the cost of oil, so it is easiest to consider the correlation using this example.

Over almost any historical period, you will notice the following patterns:

• Gold rises - the price of oil rises, while the US dollar becomes cheaper.

• Gold becomes cheaper - the price of oil falls, and the dollar strengthens its position.

From the above, the merged situation becomes clear. Not long ago, gold entered the overbought zone and a gradual decline in price began, followed by a fall in oil prices, which accelerated due to bearish play by the main market participants.

It's clear that the US dollar has also strengthened significantly in this situation, with its exchange rate steadily rising against other quoted currencies .

Currently, only artificial intervention can reverse the downward trend in gold and oil prices on the stock exchanges.