Stop Watching The Dollar Index (DXY)
Since I have been here(4 years now) I have been saying that what the dollar does pertaining to the DXY is meaningless and meant to be a distraction.
Everyone has been brainwashed to believe that if it is strong, gold and silver have to decline. It is BS except, as I have stated before, when you are placing a short term metals futures trade. That is the only time you should even look at what the DXY is doing.
Physical gold continues to make ATH’s despite recent dollar(DXY) strength. Meantime, some analysts have suggested the dollar will continue to rise in the near term, and it probably will, because the various govts. and central bankers have set things up, so the rest of the world are going to slowly cut rates before the FED actually starts to do so.
That was all by design to keep the dollar from crashing even faster than it already is. It doesn’t matter what the dollar does vs other fiat, it matters what it and all the rest, are doing vs Gold.
In the chart below you see that over the last 4 years the dollar, as depicted by DXY, went from 90 to 115, back to 100 where it has been in a sideways range since, between 100 and 107.
All the while, gold has been going higher, especialy during the time DXY went from 90 to 115.
Well that has always been the case, at least for gold.
However, there is no doubt that over stretches they can be very highly correlated, especially in terms of inflection/pivot points, and for the most part gold’s biggest bull run since the 70s corresponded almost exactly to the USD’s historic top and bear market that extended between the same decade (more or less).