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Gold - FOREX Correlations Weaken as Gold Regains Safe Haven Status

Gold - FOREX Correlations Weaken as Gold Regains Safe Haven Status

2011-05-27 02:36:00
David Liu, DailyFX Research,
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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.

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Gold

USD/CAD

AUD/USD

NZD/USD

EUR/USD

GBP/USD

USD/JPY

USD/CHF

3 Day 15 Min

-0.10

-0.17

0.03

0.20

0.27

0.44

-0.29

1 Week 60 Min

0.71

-0.58

0.44

-0.47

0.16

0.39

-0.39

2 Week 60 Min

0.41

-0.35

-0.21

-0.56

-0.44

-0.65

0.58

1 Month Daily

-0.53

0.66

0.79

0.51

0.64

0.34

-0.57

Weekly Commentary: Correlations between major commodity currencies and gold fell further this week as developments in Europe and Greece prompted investors to sell currencies in favor of metals. Furthermore, mid-week US dollar strengthening on risks of more problems with Greek re-profiling was also met with buyers entering the metals market once more to take advantage of the recent dive.

Despite the weaker correlation between major commodity currencies and gold, the connection still remains largely intact as some signals of a US and Chinese industrial strengthening are prompting investors to enter the industrial and base metals market. Because of the tight connection between base metals and precious metals, as well as Australia’s position as a major iron and copper ore producer, the correlation between the AUDUSD as well as other currencies may improve.

Gold-Forex_Correlations_05272011_body_Picture_6.png, Gold - FOREX Correlations Weaken as Gold Regains Safe Haven StatusGold-Forex_Correlations_05272011_body_Picture_8.png, Gold - FOREX Correlations Weaken as Gold Regains Safe Haven Status

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