Thursday, October 21, 2010

Gold Acts Leveraged Versus The US Dollar: Watch Out Below When Trend Reverses

With regards to our previous post on the U.S. Dollar index (USDX), now we add gold to the picture (in the form of GLD ETF, all the others are ETFs), and we see that gold has dropped 1.93% as of 2:15PM:

The 1.93% drop cannot be explained solely or even mostly by the drop in currencies.

The conclusion here is that gold seems to acts as a leveraged entity versus the USD. Watch out below if the US dollar dropping trend reverses and the USD rises.

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