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DailyFX Home / Forex Market News / Weekly Columns / Gold-Forex Correlations

Gold-Risk Correlations Rise as Metals Remains Inverse Dollar

By David Liu
31 October 2011 02:36 GMT

The following table includes the correlation between gold and the most popular currency pairs over various timeframes. A value close to +1 indicates a strong positive relationship between gold and the pair, while a value close to -1 indicates a strong negative relationship. Colored values indicate week-to-week changes of over 30%.

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Gold

USD/CAD

AUD/USD

NZD/USD

EUR/USD

GBP/USD

USD/JPY

USD/CHF

3 Day 15 Min

-0.76

0.75

0.78

0.78

0.80

-0.23

-0.76

1 Week 60 Min

-0.52

0.62

0.53

0.74

0.69

-0.20

-0.78

2 Week 60 Min

-0.97

0.98

0.92

0.98

0.92

-0.95

-0.98

1 Month Daily

-0.71

0.73

0.72

0.71

0.71

-0.13

-0.72

Last week’s commentary can be found here.

Weekly Commentary: Gold made new headways and remained correlated to riskier assets this week as markets digested news of a possible European solution to the debt crisis. However unclear the actual plan, investors sold large amounts of dollars accumulated in the months previous since the discussion of a new plan for Greece amidst the European debt crisis and bought assets including Australian dollars, Euros and gold.

Traders of the yellow metal will be closely monitoring fundamental events and economic releases this week highlighted by Central Bank rate decisions from the Reserve Bank of Australia, the Federal Reserve and the European Central Bank. Although the Federal Reserve decision, the one with the most direct effects to gold, is expected to remain at 0.25%, the following commentary from Chairman Bernanke and hints towards additional easing with be the primary driver of price action. After a sharp climb in risky assets and drop in Greenback strength, traders will continue to use caution as European debt and global slowdown risks still remain.

Also: Gold Posts Largest Weekly Advance Since 2009 - Rally to Hinge on FOMC

Gold-Forex_Correlations_10312011_Gold-Risk_Correlations_Rise_as_Gold_Remains_Inverse_Dollar_body_Picture_1.png, Gold-Risk Correlations Rise as Metals Remains Inverse Dollar

Gold-Forex_Correlations_10312011_Gold-Risk_Correlations_Rise_as_Gold_Remains_Inverse_Dollar_body_Picture_2.png, Gold-Risk Correlations Rise as Metals Remains Inverse Dollar

Written by David Liu, DailyFX Research

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31 October 2011 02:36 GMT