Gold, U.S. Dollar, EURO and YEN Price Action

Despite some recent weeks where we’ve seen both gold and the U.S. Dollar move higher, the trend came to an end today.


However the trend of trading gold in EUROs and YEN is still alive in well.

As the U.S. Dollar Index moves higher, today surpassing the 83 mark, gold priced in U.S. dollars will come under pressure. The fact Greece, Spain and the other countries in the Eurozone have shown they can’t manage their affairs is and has been cause for concern. This trend won’t change for some time.

EURO Demand for Gold

What is occurring in the Eurozone however is an increased demand for gold. This demand is driving gold priced in EUROs to new highs. Right now the EURO is trading at just over $1.30 to the U.S. Dollar.

November 18th, 2009, I asked readers to start looking at possibly trading Gold in EUROs. At that time, the EURO was trading just under $1.50.

On December 11th, 2009 I made the call that trading Gold in EUROs now making sense. 60 days later, Gold priced in EUROs was up 7.92%.

The EURO has fallen 16% since my November 18th alert and gold priced in EUROs is up 12.62% more than Gold priced in U.S. Dollars since that date.

What About the YEN?
December 12th I wrote that another area to keep an eye on was trading Gold priced in YEN.   March 31st, I finally made the call that this trade made sense.  The following chart shows how the yellow metal traded in YEN is up almost 5% more than gold traded in U.S. Dollars the last 60 days with most of that move coming after March 20th.

February 2010 – Things Getting a Little Crazy in the World

It was in February that things started to get a little hectic with the Hard Asset currencies represented by the EURO, British Pound, U.S. Dollar, Canadian Dollar, YEN and Swiss Francs.  This can be attributed to the concerns over Greece in the Eurozone occurring at that time.  Look at the following chart and see how all these currencies traded in gold were in sync and then in February, things started to get a little crazy.
But while things have been crazy for the hard currencies the U.S. Dollar, despite its current cyclical trend higher, is still in a secular trend lower.  Even the Ruble, Mexican Peso, S. African Rand and Indian Rupee have done better than the U.S. Dollar the past 6 months, despite the recent Dollar rise.
One thing to consider with the recent U.S. Dollar price of Gold is during this recent, so far unsuccessful push to new highs, it has not surpassed it’s 2009 mark.  A stronger U.S. Dollar is keeping the shiny rock at bay for now despite the demand for currency hedges in other countries.  Lastly, remember, the annual summer doldrums for Gold is approaching fast.


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About Doug Eberhardt

Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534


Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.

All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.

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