OK, headline writing is a corny job but colleague Ian MacAvity recently called himself an auric insect. Auric (adjective) – of or pertaining to gold. Insect – bug.
Ian is a gold expert so he can be as corny as he wants with his descriptors. Anyway, have you noticed that gold and the dollar have been moving more or less in the same direction – up and down – lately? How can that be? After all, gold is priced in dollars so they should move inversely.
Well, the dollar component is just that – a component. The other is the actual value of gold based on supply and demand regardless of currency. Check this chart.
There are lots of circles and lines with a paragraph on the back of each one……(oh, sorry, I lapsed into Alice’s restaurant). The point is that gold priced in euros has broken out to record highs, is in a real short-term bull market, is not overbought and had a nice test of the 20-day exponential moving average.
Maybe that talk of gold becoming a world currency is not so far off the (D-)mark.