“That is not the case at all,” states Frank Goldman, “In actuality gold rose 1.10”.
“We have to look at the strength of the U.S. dollar to understand the gold position”, he added.
Since gold is a U.S. dollar-denominated commodity, when the dollar is strong, it takes fewer dollars to purchase gold. The reverse is true when the U.S. dollar weakens. This partially explains the recent fluctuations we have seen in gold. The other element of the equation is the supply and demand for the commodity. If the gold price is higher when measured in other currencies as well, then we can deduce that demand is higher and has increased in actual value.
“If we look at the U.S. dollar as expressed by the U.S. Dollar Index® which is determined by six major foreign currencies, this gives us a more accurate measurement of the strength of gold based on predominant buyers in the world market, ” added the Accredited FX broker.
From a technical standpoint, the gold futures bulls are experiencing a good week. This weeks high was $1733.00 and their objective is to close at a chart resistance of $1755.00.
Accredited FX and Frank Goldman are long term gold bulls with investments on behalf of both retail and corporate clients in gold options with various expiry dates and prices."
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