News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
More View more
Real Time News
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/BABJdXiced
  • Heads Up:🇬🇧 BoE Cunliffe Speech due at 12:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-05-13
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 90.36%, while traders in GBP/JPY are at opposite extremes with 69.94%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/KkMtUpOZdy
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Gold: -0.21% Silver: -0.93% Oil - US Crude: -2.65% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/eNQowu5LRj
  • Germany 30 IG Client Sentiment: Our data shows traders are now net-long Germany 30 for the first time since May 05, 2021 08:00 GMT when Germany 30 traded near 15,153.80. A contrarian view of crowd sentiment points to Germany 30 weakness. https://www.dailyfx.com/sentiment https://t.co/1T0AOilLMv
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.08% 🇯🇵JPY: 0.06% 🇨🇦CAD: -0.07% 🇳🇿NZD: -0.26% 🇬🇧GBP: -0.31% 🇦🇺AUD: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/9SsLWtxeZI
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/odJkU3mp5B
  • 🇮🇪 Inflation Rate YoY (APR) Actual: 1.1% Previous: 0% https://www.dailyfx.com/economic-calendar#2021-05-13
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: US 500: -0.34% Wall Street: -0.53% France 40: -1.40% Germany 30: -1.62% FTSE 100: -2.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/9QFO66TbHM
  • $BTC https://t.co/Ai3O9ITqEu
What Does the USDOLLAR Mean for Gold

What Does the USDOLLAR Mean for Gold

Walker England, Forex Trading Instructor

Talking Points

  • Gold has dropped as much as 30% for the 2013 trading year.
  • The USDollar can give insight into commodity pricing.
  • Look to the trend and correlations to create an opinion for 2014.

Gold (XAU/USD) remains a popular tradable instrument as well as a popular commodity known for its store of value. While gold has traditionally been a slow moving asset, it has had some spectacular price swings since the 2008 financial collapse. The 2013 trading year has continued this trend with prices dropping as much as 30%, as displayed on the daily chart below.

With these sharp movements traders will surely be looking to take advantage of the gold market again in 2014. Today we will be looking at Gold and how to develop a trading opinion with the USDOLLAR for the New Year.

Learn Forex – Gold 2013 Trend

What_Does_The_USDOLLAR_Mean_For_Gold_body_Picture_3.png, What Does the USDOLLAR Mean for Gold

Gold and the Dollar

When pricing a commodity like Gold it is always important to view the denomination that it is traded in. Gold, (XAU/USD) is based in the US Dollar, and is quoted in Dollars per oz. This means the price of gold is directly impacted by the price of the USD. Below we see Gold compared to the Dow Jones FXCM Dollar Index(USDOLLAR). These two assets are inversely correlated, meaning they will head in opposing directions.

So how can traders use this information to their advantage? Well traders that may not have a clear outlook on Gold can use the USDOLLAR to form a trading bias. If you believe that the USDOLLAR will continue to rise in value, by way of correlation this would make you bearish on Gold. Conversely, if you think that the USDOLLAR is poised for a decline, you could also consider yourself bullish on Gold.

Learn Forex – Gold & Dollar Correlation

What_Does_The_USDOLLAR_Mean_For_Gold_body_Picture_4.png, What Does the USDOLLAR Mean for Gold

2014 Trading

Traders that are looking at trading Gold in 2014, will need to consider looking at the continuation of its current downtrend. After this year’s decline, an immediate bias would be to utilize a trend based trading plan to sell the commodity towards lower lows. Currently price is supported above the June low established at $1,180.15

If Gold fails to break a new low in the New Year, it could signal a period of consolidation or even a potential price reversal for the commodity. Traders can use the USDOLLAR to their advantage to spot a turn in the market. Current 2013 support on the Index remains solid at 10,000. A drop below this value would indicate a shift to USDOLLAR weakness, and likewise a strengthening in Gold.

---Written by Walker England, Trading Instructor

To contact Walker, email instructor@dailyfx.com. Follow me on Twitter @WEnglandFX.

To be added to Walker’s e-mail distribution list, CLICK HERE and enter in your email information.

Become a Smarter Trader Today

Claim your FREE universal membership to DailyFX Internet Courses& save yourself hours in figuring out what FOREX trading is all about.

You'll get this FREE 20 minute “New to FX” course presented by DailyFX Education. In the course, you will learn about the basics of a FOREX transaction, what leverage is, and how to determine an appropriate amount of leverage for your trading.

You can instantly register for free hereto start your FOREX learning now!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES