You can see by the blue trend-lines that gold likes to follow a narrow band, even more narrow when rising. So it is unlikely that it will move sideways between the two black trend-lines for very long... maybe for a little while but notice from the past this band is far too wide for gold's comfort.
The red compare is USDJPY - gold's nemesis. The two are in collision, locked in mortal combat... to the victorious, the spoils of riches and a path higher... to the vanquished, humility and a bears breakfast...
lol and I'm long both...the broker wins in the end!
albertwt
⋅
Graham, thanks for sharing and overlaying both charts.
I never knew what's the correlation between JPY as currency versus Gold as investment commodity.
graham.edwards84
⋅
Well it has to do with the purchasing power of the US$. When it goes up gold becomes more expensive to buy. USDJPY specifically? I'm not sure to be honest, can anyone else comment on this? It also seems that in the more recent years the correlation has become tighter.
albertwt
⋅
Cool, thanks for the explanation mate, I appreciate your ideas.
Keep up the good work.