Do Gold & The Dollar Always Move Opposite Of Each Other?

On Tuesday morning, gold was up .5%, but so was the dollar.  When was the last time we saw these two moving in the same direction?  If you think the dollar is going down, should you necessarily go buy gold?

Below is a picture of the correlation of gold & the dollar.  When the chart is in the green, that means the two are correlated positively.  Most of the time since 2005, it has been a negative correlation.  But, there are times where the inverse correlation breaks down.  This breakdown can ruin your strategy at times.  So, be careful and don’t assume they are always negatively correlated.

 

gold dollar correlation 11 3 09

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