Let’s start with this “Think Quick!” hit: Gold’s price direction always moves opposite to that of the Dollar. If you said “Wrong!” you’re right. But you might be surprised just how often they actually move in the same direction: for the 206 months (including this February) of the millennium-to-date, Gold and the Dollar Index have recorded net changes of the same direction in 79 months, i.e. they’ve been in positive correlation some 38% of the time … which for you West Palm Beachers down there means that Gold and the Dollar have been moving in opposing directions only 62% of the time, (not 100% as we’re often led to believe).
That said, Gold and the Dollar year-to-date have been in almost perfectly-mirrored negative correlation as we here see from the get-go. Good or bad depends on which side of the glass one is:
Of course, at the end of the day, much is made over the illusion of change, rather than the reality of supply, of which for Gold as we know there is relatively little. The price of Gold from 2001-to-date is presently +386% while the Dollar Index is -18%. But that’s peanuts: the supply in so-called “unfunded liabilities” of $210 trillion is 1500% of the $14 trillion “M2” money supply. Were the money supply thus inflated 15 times to cover the liabilities — simply as a rough thumbnail sketch, you understand — Gold today at $1,331/oz. x 15 = $19,965/oz. Just saying. And from our purview, we’re only looking for $2,000/oz. Peanuts indeed.
That shall be the “then”. The “now” reminds us that Gold cannot get to the “then” of 2000 without first getting up past Base Camp 1377. Sick of hearing about it? You ought to be. Whether referring to 1377 as the “resistance that was support”, or as “the roof”, or as some “anti-magnetic force” repelling price back down every time it gets close, or as just depicted a week ago as Gold’s “highest hurdle in history”, it’ is what it is: just when 1377 looks en route to be taken out, time and again instead it’s Gold that’s taken out of the lineup and sent back to the locker room.
