I think this is brilliant sleuthing by our member Red Label<\/p>\n
His original thesis is posted on the sidebar https:\/\/goldtadise.com\/?p=417060<\/a><\/p>\n I am re posting his comments to a query by Northstar in a post below that many have likely missed.<\/p>\n here is my interpretation first:<\/p>\n I believe Red is saying he has discovered that the ratio 120,000 divided by the DXY is a constant ( plus or minus 3%) where the price of gold is adjusted to by the PTB\u2026.within the framework of the Bretton Woods Monetary System)<\/p>\n Basically Red is saying that Gold is tied to the DXY ( dollar index) and will not be in a Bull until it is rising regardless of the Dollars movements.<\/p>\n Until this ratio is broken , as it was going into the 2011 top\u2026the price of gold is going nowhere and is NOT in a Bull market<\/p>\n Do I have this right Red ?<\/p>\n If the Gold price is wandering from this 120,000 \/ DXY it will be adjusted up or down frequently to get back in line.<\/p>\n …………………………….<\/p>\n That\u2019s the theory Fully. IMO physical buying or selling from other sources other than the CB\u2019s drives deviations in Gold price. IMO The CB\u2019s want and need a steady price in Gold. <\/p>\n If the $USD is = 100 has shown that Gold price = $1200 +\/-. there has been a correlation in play since last November regardless of the $USD Index Gold has remained in this ratio +\/- 3%. The deviation from the ratio being overbought oversold conditions in the market. The OB\/OS conditions were in the range of $20-$50. The interesting thing OS conditions were not necessarily followed by OB conditions and vice versa.<\/p>\n 1200\/($USD\/100)<\/p>\n Chart in TradingView \u201c120000\/DXY\u201d<\/p>\n Likewise today 1200\/(89.70\/100)=1337 Gold is showing to be $7 below the ratio at the moment. Gold has tracked this ratio for the last 15 months step for step. If the ratio holds 80 $USD will yield $1500 +\/- Gold (likewise if the 110 $USD will yield $1090 +\/-). So if you anticipate in your post a $100 dollar drop in Gold (ie $1200) it would likely mean an increase in the $USD near 100 unless the ratio breaks.<\/p>\n IMO the correlation needs to break for there to be a bullish \/bearish market in Gold otherwise it is simply currency movement (purchasing power of the $US).<\/p>\n","protected":false},"excerpt":{"rendered":" I think this is brilliant sleuthing by our member Red Label His original thesis is posted on the sidebar https:\/\/goldtadise.com\/?p=417060 I am re posting his comments to a query by Northstar in a post below that many have likely missed. … Continue reading