Dust flux, Vostok ice core

Dust flux, Vostok ice core
Two dimensional phase space reconstruction of dust flux from the Vostok core over the period 186-4 ka using the time derivative method. Dust flux on the x-axis, rate of change is on the y-axis. From Gipp (2001).

Saturday, October 19, 2013

Gold vs USD, one year

Today we look at the relationship between gold and the US dollar.

The annotations refer to the gold price. An investor in US dollars would no doubt reverse the terms. And this is important because there are a lot more people invested in USDX than in gold.

The graph supports the supposed inverse relationship between the US dollar and gold.

Here is some context (updated from here).

The white pane is the area covered by the first graph.

Note that the price movements between gold and the dollar are not always inversely correlated--there is a six month period from November 2009 to May 2010 when the two moved in tandem, each increasing about 20% (which was actually a double-win for holders of gold). Perhaps a lot of people were taking Richard Russel's advice (50% USD, 50% gold).

Since May 2010, there has been one large advance and decline (in gold relative to the dollar). The advance and decline followed distinctly different trends. I would note that the current price point for gold and USDX is the same as near the beginning of the last large advance that carried us to just shy of $1900 (weekly closing).

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