I don't mean to never use correlations. They can be helpful.
What I was trying to say is not to look at another financial trading instrument like the Dow, The Euro, Copper, etc. , See a correlation to Gold and then assume that gold will do the same or base trades on the correlation for an extended period of time.
They all usually break down at some point.
Here is a chart of the GOLD SPOT with the USD OverlayeD -E D I T: looking at it again in this period the two were basically moving in tandem,gold up usd up and gold down usd down, not in the last segment under my line u can see gold broke down to support and the USD continued up. If you were betting based on prior correlation that gold would have followed, you would have been stopped out.Or at least in the red. ----- Look at the sort of double top formation on gold. Then look at the USD line. It made the exact same dip.Except on gold's second top, that seems to be where the correlation AU ^ USD ^ seemed to decorrelate creating GOLD v USD ^ which happens to be the more classic relationship/ correlation.
Let's look at another correlation of the two on a higher time frame in the next post.
You can see (the liine i drew) (and the highlighted area)
thAT at times recently they have moved together up. and sideways. And moved inversely (the more recent area on chart,) they are inverse again.
[quote=muntu ntu;5163787]
Not even the dollar index?
What I was trying to say is not to look at another financial trading instrument like the Dow, The Euro, Copper, etc. , See a correlation to Gold and then assume that gold will do the same or base trades on the correlation for an extended period of time.
They all usually break down at some point.
Here is a chart of the GOLD SPOT with the USD OverlayeD -E D I T: looking at it again in this period the two were basically moving in tandem,gold up usd up and gold down usd down, not in the last segment under my line u can see gold broke down to support and the USD continued up. If you were betting based on prior correlation that gold would have followed, you would have been stopped out.Or at least in the red. ----- Look at the sort of double top formation on gold. Then look at the USD line. It made the exact same dip.Except on gold's second top, that seems to be where the correlation AU ^ USD ^ seemed to decorrelate creating GOLD v USD ^ which happens to be the more classic relationship/ correlation.
Let's look at another correlation of the two on a higher time frame in the next post.
You can see (the liine i drew) (and the highlighted area)
thAT at times recently they have moved together up. and sideways. And moved inversely (the more recent area on chart,) they are inverse again.
DislikedHere is another mini lesson.
Don't always try (as many do not just you) to correlate GOLD to something else.Ignored
Not even the dollar index?
Attached Image (click to enlarge)
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
