USD vs Gold Sector
Steve Saville examined the relation of USD$ to gold sector in his 2008 post. All these inter market relationships have been examined before.
The charts tell the story well.
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“When the US$ strengthens against the euro it creates a psychological headwind for gold-related investments and this psychological effect will usually dominate for a while, but the US dollar’s trend relative to other fiat currencies is only one of several drivers of the gold price. Other important considerations are credit spreads (measures of financial market confidence), the yield spread (a measure of financial market liquidity), real interest rates, and money-supply growth trends.
The following chart provides a good example of how the gold sector will sometimes react to an intermediate-term US$ rally. The chart, which compares the performances of the HUI and the Dollar Index during 2005, shows that the HUI tanked during the first part of the Dollar Index’s intermediate-term advance and then began to trend upward despite the dollar’s continuing strength. Moreover, it shows that in 2005 the bottom of the HUI’s correction occurred two days after the Dollar Index broke upward from a basing pattern. This means that we are potentially in exactly the same position today as we were at the May-2005 bottom (the Dollar Index broke upward from its basing pattern on Thursday 7th August 2008).”
“It is also worth noting that the best part of the 1973 rally in gold stocks occurred while the US$ was strengthening relative to other fiat currencies.”
http://www.321gold.com/editorials/saville/saville081208.html