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Gold Overcoming Dollar

Gold has been vexed in recent months by the US dollar soaring again.

Its latest blast higher prematurely truncated a resurging gold upleg again, damaging sector psychology again.

Contrarian traders ought to be familiar with this script of Fed hawkishness goosing the dollar which unleashes big gold-futures selling.

Yet this recurring gold-bearish theme since early 2022 is crumbling, gold is starting to overcome the US dollar.

The last couple months don’t feel like it, as gold plunged 4.5% at worst between mid-July to mid-August.

That killed a promising rally that had just technically confirmed gold’s powerful upleg was resuming.

That month-long pummeling was driven by the benchmark US Dollar Index rocketing up 3.5%, scaring gold-futures speculators into aggressively selling.

Gold did lose ground relative to the dollar during that span.

But while the USDX’s scorching momentum-chasing rally continued, gold defied that and bounced quite substantially.

By last Friday the dollar’s gains had grown to a massive 5.3% in just 1.9 months, enormous for the world reserve currency.

Yet gold’s rebound left it down merely 2.1%in that entire time frame! That made for a great show of relative strength versus the dollar, way better than the dividing line of mirrored parity.