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Currency Pair Correlations with Gold


Gold is an asset. As such, it has intrinsic value. However, that value can fluctuate over time, sometimes in a volatile fashion. As a rule, when the value of the dollar increases relative to other currencies worldwide, the price of gold tends to fall in U.S. dollar terms.

It is because gold becomes more expensive in other currencies. As the price of any commodity moves higher, there tend to be fewer buyers; in other words, demand recedes. Conversely, as the value of the U.S. dollar moves lower, gold tends to appreciate as it becomes cheaper in other currencies. Demand tends to increase at lower prices.4

Gold does not yield interest in itself; therefore, it must compete with interest-bearing assets for demand. In other words, other assets will command more demand because of their interest rate component.

In Sri Lanka gold prices vary with LKR/USD rates. If doller goes up / lkr goes down then Gold price goes up. Another few more factors effecting to determine the Sri Lankan Gold price as per the Colombo gold market updates.

Other Currency Vs GOLD

Gold and AUD/USD

Australia is the third largest gold producer in the world, selling approx. $5Billion/year. So AUD/USD raises when gold goes up.

Gold and NZD/USD

New Zealand is also one of the biggest gold producer in the world. With gain in gold, NZD/USD also goes up.

Gold and USD/CHF

CHF raises when gold goes up as 25% of Switzerland’s reserve are backed by gold and pair moves down.

Gold and USD/CAD

CAD raises when gold goes up as Canada is 5th largest producer of gold. Hence, when gold raises up, USDCAD goes down

Gold and EUR/USD

Both Gold and Euro are ANTI_DOLLARS. If price of gold goes up then EUR/USD may go up as well.

Oil and USD/CAD

CAD raises when Oil goes up as Canada is one of the top Oil Producer that exports 2 Million Barrel/Day . USDCAD goes down with the rise in Oil.

Publiahed by @goldceyloninfo

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