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Originally Posted by TraderPierre
I'm trying to work out the logic in that analysis.
USD down, gold up. Yup, sounds reasonable, flight to safety/quality.
USD stops falling it starts to strengthen. Yup, logical.
Gold down, dollar collapse? Why? Where are the speculative funds from gold going to go if not back into the US when the time is right?
The US dollar will never have a wholesale collapse, central banks will intervene before that happens. Do you really think the BOJ or ECB, or even the Fed will just stand aside and allow speculators to dictate the prosperity of major economies? A dollar freefall will never happen.
There's talk of BOJ intervention at 80 Usd/Jpy, and the ECB have hinted they would be uncomfortable with Eur/Usd above 160.
Ultimately the price of oil will dictate where we all go from here, as it always has done.
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I mean Gold value will go down but USD not. USD doesn’t depend on Gold fluctuations, but Gold depends on USD fluctuations as there are much more money in USD equivalent value than in gold. That doesn’t possess any threat to ECB and Fed, quite the contrary, as the price of metals (which are as a matter of fact, raw materials) goes down then the price of production will be cheaper.